Novozymes (Sell, TP: DKK420.00) - Strong volumes in Q1
Organic growth surprised us at c10% YOY in Q1, driven by strong volumes in all divisions except Household Care. The full-year organic growth guidance was lifted to 4–8% (3–7) while the EBIT margin was kept at 25–26%. Communication around pricing and gross margin was marginally better than what we expected. Thus, we reiterate our SELL but have lifted our target price to DKK420 (410), reflecting the better-than-expected Q1 results and guidance.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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