Otovo (Buy, TP: NOK16.00) - Patience needed
While we expect Otovo to continue to deliver on the factors within its control, the residential solar market has become somewhat more challenging, with lower electricity prices, regulatory headwinds in key markets and higher interest rates. As a result, we believe tangible signs of improving profitability and monetisation of the leasing portfolio are needed for a re-rating of the stock. Hence, we have raised the discount to our NOK32/share SOTP to 50% (35%), and lowered our target price to NOK16 (21). We reiterate our BUY, but believe investors will need to be patient.
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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