Q3e weakness priced in
We have cut our EBITDA by 17% for Q3e and 8% for Q4e, as the tightening plate–scrap spread is burdening SSAB Americas’ earnings (Q3 results due at 08:00 CET on 27 October). We retain our bullish view on SSAB Europe and Special Steels, due to industry improvements in China and Europe combined with a stable demand outlook. The 16% reduction in SSAB’s EV/EBITDA since mid-July suggests that US weakness has been largely priced in. We reiterate our BUY recommendation, but have cut our target price to SEK44 (47).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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