Storytel (Buy, TP: SEK65.00) - Step-change Q3 results ahead
Investor sentiment could remain lukewarm short-term given competitive concerns related to Spotify’s accelerated audiobook push, weak consumer trends, a lack of valuation support near-term from profit lines below EBITDA in the P&L, and shareholder overhang risks. That said, we expect strong Q3 results based on robust summer months, according to our app data analysis, and we are 22% above Visible Alpha consensus EBITDA, while its likely first positive OpFCF could reestablish confidence in its profitable growth strategy. We reiterate our BUY but have reduced our target price to SEK65 (74) based on a lower multiple for Non-Nordic Streaming.
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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