Norske Skog (Buy, TP: NOK55.00) - Turning the page
We initiate coverage with a BUY and NOK55 target price. In our view, Norske Skog still suffers from negative investor sentiment on its exposure to declining paper markets and recent bankruptcy. The reality is, following restructuring and asset disposals, that it now has a strong balance sheet and a cash-generative paper platform, enabling industry-leading DPS. Its medium-term strategy includes investments in bio-energy and potential asset conversions. The stock is trading at 3.5x 2020e EBITDA with a 2019–2022e c14% dividend yield, both near historical records for peers.
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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