Orkla (Buy, TP: NOK100.00) - Positives offset Q1 headwinds
We expect a slightly negative report for Orkla (due at 07:00 CET on 5 May), with results slightly below consensus. We have lowered our target price to NOK100 (105) to reflect our updated SOTP following the market’s revaluation. We reiterate our BUY, given what we view as an attractive valuation relative to peers, limited direct exposure to Russia, and Hydropower assets set to more than offset some of the near-term raw-material headwinds.Orkla is a consumer goods company in the Nordic and Baltic regions. The Branded Consumer Goods area comprises five business areas: Orkla Foods, Orkla Confectionery and Snacks, Orkla Home and Personal, Orkla International and Orkla Food Ingredients. Co.'s other businesses consist of Granges, a supplier of solutions for the heat exchanger industry; Hydro Power, which produces and supplies power to the Nordic power market; and Orkla Financial Investment, which consists of Orkla Eiendom; in addition to its investments in Sapa (JV), which is engaged in extruded aluminium solutions; and Jotun AS, which is a manufacturer of paint and powder coatings.
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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