Novozymes (Sell, TP: DKK290.00) - Q1 surprises on the upside
Novozymes announced Q1 organic sales growth of c10% and a preliminary EBIT margin of c29%; however, it suspended its 2020 guidance on Covid-19 uncertainty. The share buyback programme (DKK1.5bn) remains in place, as does the dividend policy and capital structure policy. Despite the better than expected Q1 we have reduced our 2020e organic growth, as the outlook for Bioenergy in particular has worsened since our last update. We reiterate our SELL and DKK290 target price.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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