Rana Gruber (Buy, TP: NOK90.00) - Riding high on strong iron ore prices
Q4 adj. EPS of NOK6.1 was 19% above our estimate. The DPS for Q4 was NOK4.3, in line with the 70% payout policy and extending the run of quarterly distributions (Rana Gruber has paid out ~NOK32 in dividends since its IPO in 2021). While we have lowered our 2024–2025e EPS by 5–4% following the 2% decline in iron ore futures prices, we believe Rana Gruber is attractively valued at a 2024e P/E of ~6x and an implied dividend yield of ~11%. In addition, the company is set to benefit from its Fe65% upgrade from 2025 and potentially a green premium for Fe67% down the line. We reiterate our BUY and have raised our target price to NOK90 (85).
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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