Scatec (Sell, TP: NOK45.00) - Rising bond yield still overlooked
While Scatec’s strong Q3 results and revised guidance sent the stock up 11% yesterday, we believe the capital markets overlooked its net debt miss versus consensus, corresponding to NOK5/share. The bond yield continues to move higher, having risen to 9.6%. We still believe the share price is lagging behind the bond market, and that the cost of equity should be at a premium to the bond yield, not on a par with it as implied by the current price. In our view, a higher cost of equity could result in the Scatec revising its growth plans; we reiterate our SELL and NOK45 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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.