Norske Skog (Buy, TP: NOK100.00) - Quality at unfounded discount
Despite weaker publication paper prices and still-weak demand weighing on near-term earnings, we emphasise the major impact of the weaker NOK that should boost profits for Norske Skog’s two mills in Norway. On these positive FX effects, our 2023e EBITDA is largely intact but we have raised our 2024e EBITDA by 20%. We reiterate our BUY and, with an increased macro risk, our target price remains NOK100 despite much higher 2024-25 forecasts.Norske Skog ASA is a Norway-based company engaged in the paper industry. The Company manufactures, distributes and sells publication paper and pulp, including long and short fiber sulphate pulp, newsprint, magazine and bleached kraft paper, and particle boards. Its business activities are divided into two operating segments: publication paper Europe and publication paper Australasia. The publication paper Europe segment includes production and sale of newsprint and magazine paper in Europe. The publication paper Australasia segment includes production and sale of newsprint and magazine paper in Australasia. It owns and operates paper mills in Norway, France, Austria, Australia and New Zealand.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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