Norsk Hydro (Sell, TP: NOK50.00) - Q1 slightly on the soft side

Q1 EBITDA was c2% below consensus, with a somewhat soft mix, as Extrusions and Aluminium Metal, the two largest segments, were below forecasts. We have increased our 2024e EPS by 7% on the USD2,600/t spot aluminium price, and 2025–2026e by 2% on the Q1 results. We are 30% below consensus 2025e EBITDA; we do not see enough demand to raise aluminium prices above the marginal producer’s cost, as the price appreciation in recent weeks suggests. We still expect aluminium prices to decline with lower global energy prices, and reiterate our SELL and NOK50 target price.

Demand growing faster than supply - BUY

Q1'24 EBITDA of NOK 5.4bn, '24e-'26e EBIT up 2-3% post report. Market tightening rapidly in Q1 - demand up 5%, supply up 3%. Reiterate BUY — TP NOK 75.

EBITDA 2% below on higher cost

Nokian Tyres (Hold, TP: EUR9.00) - Soft Q1, with or without setbacks

The Q1 results were below our expectations, even after adjusting for the negatives on the group profit from the political strikes in Finland and the Red Sea conflict. On a positive note, the PCT price/mix was guided to hold up well, partly offsetting our revised lower sales expectations, while the Romanian factory appears to be ramping up on schedule. We reiterate our HOLD but have cut our target price to EUR9.0 (9.5), after lowering our 2024–2026e clean EBIT by c6% on average.

Lyko Group (Sell, TP: SEK95.00) - Stretched balance sheet

Following the Q1 report, we believe Lyko will not only have to make more substantial progress in balancing growth and cost control, but also consider new funding options more seriously. With financial expenses eating up earnings, its current debt position, and stretched balance sheet (net debt/EBITDA c4.6x), we have downgraded to SELL (HOLD) and cut our target price to SEK95 (128).

Resurs Holding (Buy, TP: SEK18.00) - Resur-recting the case

The market appears to be pricing in credit losses remaining high for many years, but we see the potential for declines starting in mid-2024, with early positive signs in March. We also find it likely that margins will be stable from here, which is not reflected in consensus. At a P/E of 3–4x for 2025e, we see good risk/reward. We have raised our 2025–2026e EPS by 3–7%, our target price to SEK18 (15), and have upgraded to BUY (HOLD).