NRC Group (Buy, TP: NOK20.00) - Q2 supportive for recovery case
The Q2 results were broadly in line with our estimates and Bloomberg consensus, while NRC restated its focus on improving the EBIT margin. We find this supportive for the recovery case and reiterate our BUY and NOK20 target price. Given the new CEO is set to start on 1 October, a near-term relief rally seems premature, despite the positive Q2 margin trend. The upside potential to our target price remains one of the largest among our covered construction names – but so is the risk.NRC Group collects, processes and sells map data. Co. provides services to the Norwegian market, but focuses mainly on projects abroad. Co.'s geo server, BlomURBEX®, enables online distribution of Co.'s products and databases to its customers. The content of BlomURBEX® consists of Co.'s oblique aerial images, TerraItaly® database and 3D city models. Co.'s operations are divided into two main business areas: Blom Geo Engineering Services, which collects and produces geographic information; and Blom Information Services, which provides geographic information as standardized services or through applications adapted to various uses and platforms.
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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