NRC Group (Hold, TP: NOK17.00) - Strong Q3 order bookings, but not where they are needed the most
NRC announced solid order bookings of cNOK2bn in Q3, making it the second-best ever quarter in terms of orders. However, volumes for the Swedish operations remain low, and we see a risk that NRC might again fail to raise EBIT margins in 2022. We see downside risk in Infront consensus ahead of the Q3 results (due at c07:00 CET on 9 November) and a weak order intake in Sweden, and thus reiterate our HOLD and NOK17 target price. We continue to see solid upside potential if the company can lift its EBIT margins, but owing to its track record, our view is that ‘seeing is believing’.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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