Novozymes (Sell, TP: DKK270.00) - Strong EBIT margin from one-offs
We forecast Q2 organic revenue growth of c-0.2% YOY (results due at 08:00 CET on 8 August), as we see no significant improvement in the key divisions, and as we now forecast negative revenue growth in Bioenergy in Q2. We expect an EBIT margin of 36.4% due to one-off gains (c25.6% underlying). We believe the 2019 guidance will be unchanged. We reiterate our SELL but have raised our target price to DKK270 (230).Novozymes is a biotechnology company based in Denmark. Co.'s business operations are centered on the development of industrial enzymes, microorganisms, and biopharmaceutical ingredients. Co. provides business-to-business biological solutions used in the production of numerous products such as biofuel, detergents, feed, and crops. Co.'s business operations are organized along two segments: the Enzyme Business which is divided into four areas, providing industrial enzymes for household care, food & beverages, bioenergy, and feed & other technical; and the BioBusiness which is home to Co.'s microorganisms and biopharmaceutical ingredients.
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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