Scatec (Hold, TP: NOK96.00) - Negative growth revisions ahead
With more cash tied up in Ukraine and a lower share price (down 77% from peak), making Scatec less likely to issue equity for growth, we believe consensus will incorporate a slower growth trajectory. We maintain our estimate of 4.7GW growth by 2025 (~60% below guidance), based on no incremental cash injection in the business. With a likely negative consensus revision spiral ahead and debate related to its growth ambitions, we believe future growth will be valued at a discount. We estimate an intrinsic value for the existing business of NOK71/share but, having risked our growth estimates by 30% and with zero value for Ukraine, we have cut our target price to NOK96 (114). We reiterate our HOLD.
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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