Orkla (Hold, TP: NOK89.00) - Strong first tertiary for Jotun
Jotun provided a trading update for its 1 tertiary result yesterday after close. Although the majority of the results are already reflected in Orkla’s Q1 results, we find the sales trend and margins better than we had expected and eye positive revisions to consensus 2020 EBIT for Jotun in the range of 15–25%, translating into a 2% positive revision to consensus EPS for Orkla. All else being equal, this could have a cNOK4 positive impact on our SOTP valuation of Orkla.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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