Norva24 (Buy, TP: SEK34.00) - Profit margin trend lagging behind
Q2’s profit margin trend was below our forecast as Norva24’s capacity utilisation across its branch network was uneven, with improving FCF generation a partial mitigator. We have cut our 2023–2025e EPS by 8–10%, awaiting a reversal in the EBITA margin trend. Demand in the fragmented European UIM service market remains strong, supporting a financial model with the potential for a ‘buy and build’ sector roll-up. We reiterate our BUY, but have cut our target price to SEK34 (42).
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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