Otovo (Buy, TP: NOK43.00) - A safe house in a rough neighbourhood
With the threat of recession and rising interest rates still hurting valuations of growth stocks, we consider Otovo well placed given high inflation adjustments to leases reducing the negative effect from rate hikes, and spiralling energy prices continuing to drive demand for residential solar. We await news on the refinancing of the company’s lease portfolio, and consider a potential relaxation of its LTV covenant key for increasing the value generated by the subscription portfolio, and thus a potential share-price trigger. We reiterate our BUY and NOK43 target price.
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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