Scandic Hotels (Buy, TP: SEK125.00) - 2020e FCF yield of 10%
In line with the guidance, Q1 organic growth was 4.7% YOY in the seasonally quietest quarter. IFRS16 affected the result structure as expected, but we have largely maintained our underlying forecasts. Using old valuation multiples is less straightforward with IFRS16, with the stock now trading at a 2020e FCF yield of 10.0% (12.3% pre-expansion capex), which we find undemanding for the leading Nordic hotel operator. We reiterate our BUY and SEK125 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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