Rana Gruber (Buy, TP: NOK60.00) - Still-attractive iron ore prices
We expect Q2 adjusted EPS of NOK1.9 (results due at 07:00 CET on 24 August). During Q2, iron ore prices fell from ~USD160/t at end-Q1 to ~USD120/t. We estimate an average Q2 iron ore price of USD118/t per shipment, excluding freight (USD101/t when accounting for lag effects from Q1). We have cut our 2023–2024e EPS by 35–11% after a ~19–11% decline in the iron ore futures curve (slightly offset by 6% NOK depreciation versus the USD) and thus our target price to NOK60 (65). However, we reiterate our BUY.
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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