Dodged a bullet in the US
We keep our BUY recommendation and have raised our target price to SEK45 (44). Our group-level estimates have not changed significantly post the Q3 report. The impressive Q3 earnings beat was mainly driven by one large delivery in the US, and we expect to see weakening margins for SSAB Americas in Q4. Special Steels looks set to drive earnings growth in 2018e, and we consider 2018e EV/EBITDA of 7.2x to be a fair value for SSAB, a 15% premium to peers.SSAB is a supplier of high strength steels with products comprising various qualities and dimensions within wear steels and structural steels. Co.'s solutions also include services, from concept to finished delivery. SSAB Wear Services also provides advice, repairs, and sales of spare parts to the aftermarket. The business is organized into three business areas; SSAB Americas, SSAB EMEA and SSAB APAC as well as the subsidiary, Tibnor, which is a steel distributor in the Nordic region. SSAB EMEA consist of Europe, the Middle East and Africa; SSAB Americas of North and Latin America; SSAB APAC of Asia, Australia and New Zealand and Tibnor of steel and metal distribution in northern Europe.
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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