Scatec (Sell, TP: NOK65.00) - Fairly neutral Q2 report
We consider Scatec’s Q2 report fairly neutral, but have made small changes to the timing of projects under construction and in its backlog. As a result, have raised our 2023e EBITDA by 5% assuming more of the remaining NOK1.8bn in D&C revenues is recognised in the year, and cut our 2024e EBITDA by 2% to reflect some slower backlog progress. The stock is trading ~20% above our valuation of the existing business and visible growth, which we consider unwarranted, given the limited capacity on the balance sheet to fund growth. We reiterate our SELL and NOK65 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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