Norske Skog (Buy, TP: NOK32.00) - Unfounded concerns
Since the Q3 report that showed that Norske Skog is in good shape in difficult markets, the share price is down c40% on apparent concerns that Norske Skog will become financially distressed. However, after scrutinising the balance sheet and the debt payment structure, we believe the situation is under control. With our earnings forecasts largely intact, we have upgraded to BUY (HOLD) and reiterate our NOK32 target price following the recent share price weakness, in our view based on unfounded concerns and misunderstanding.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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