Royal Unibrew (Hold, TP: DKK685.00) - Mixing its drinks
We initiate coverage with a HOLD and DKK685 target price. We consider Royal Unibrew a unique and well-managed multi-beverage provider, with 6–8% EPS growth forecast for the medium term. While its best-in-class return profile could justify a premium valuation, we see limited upside potential from here (c26x 12-month P/E, c33% premium to main peers) given its less-positive EPS growth outlook than peers.Royal Unibrew is a holding company based in Denmark. Co. is engaged in the production, marketing, sale and distribution of beverages. Co.'s main focus is on branded products, such as beer, malt, and soft drinks, including carbonated soft drinks, mineral water and fruit juices. Co.'s portfolio comprises both its own international brands, such as Royal, Ceres, Faxe, and national brands, such as Lomza in Poland, Lacplesa Alus in Latvia. Co. also offers license-based brands, such Heineken and the Pepsi Group's products, which are distributed in Denmark on the basis of license agreements. Co. is primarily active in Western and Eastern Europe and in the international malt drinks markets. .
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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