SAS (Hold, TP: SEK13.50) - Low capacity growth going into H2e
The Q3 results were slightly above consensus and the guidance was unchanged. We believe the low capacity growth guidance for H2 should be supportive for yields, but a weak SEK and fuel hedges above market prices will put a lid on positive earnings revisions near-term. We still find 2019e earnings multiples uninspiring, and reiterate our HOLD and SEK13.5 target price.SAS is engaged in providing transportation services. The core business of Co. is operating passenger flights on a Nordic and international route network. Co.'s three main operational hubs in Copenhagen, Stockholm and Oslo form the backbone of its flight network. In addition to passenger flights, Co. provides air cargo and other aviation services at selected airports in its route network. Co.'s operations include Scandinavian Airlines. In addition to the airline operations of the consortium Scandinavian Airlines System, Scandinavian Airlines also comprises ground operations, technical operations, SAS Cargo and Blue1. Scandinavian Airlines includes SAS Cargo and SAS Ground Handling.
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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