Norske Skog (Buy, TP: NOK30.00) - High risk, but potential high reward
Although we have lowered our 2025–2026e EBITDA by 17%–4% on higher ramp-up-related costs, we find the Q1 report positive overall. Besides slightly better underlying Q1 earnings compared to our forecast, management remains firm that the balance sheet situation is under good control at the same time as the long period of ambitious growth investment is ending in H2. Thus, we continue to see attractive cash flows from 2026e and a strong revaluation potential if our earnings forecasts materialise. We reiterate our BUY and NOK30 target price.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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