Swedish Match (Buy, TP: SEK87.00) - Eyes on Smokefree margins
Largely in line with consensus, we expect strong Q1 revenue growth of c12.1% (consensus 11.9%), but with margins under pressure. We expect strong Zyn volume growth of c38%, driven by increased promotional activity in the US, which we expect to add to the margin pressure. However, we view the margin pressure as a temporary and welcome trade-off that should enable Swedish Match to secure a larger share of a highly attractive market. We reiterate our BUY and SEK87 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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