Swedish Match (Hold, TP: SEK310.00) - Shareholders set for cash payout
We expect Swedish Match’s Q4 adjusted EBIT to be up 5% YOY driven by Scandinavian snus with a positive effect from price hikes in particular. To reflect the sale of the final STG shares, we have factored in a special dividend of SEK7.50 in addition to our ordinary 2017e DPS of SEK9.00. We have raised our target price slightly to SEK310 (305) reflecting a 2018e EV/EBIT of 15x. We keep our HOLD recommendation ahead of the Q4 report (due 14 February at 08:15 CET).Swedish Match develops, manufactures, markets, and sells snus and snuff, other tobacco products (cigars and chewing tobacco), and lights (matches and lighters). Snus and snuff are smokeless tobacco products that are produced and sold primarily in Sweden, Norway and the U.S. Other tobacco products represent cigars and chewing tobacco manufactured and sold on the U.S. market. Lights include manufacturing and distribution of matches and lighters. Other operations are primarily the distribution of tobacco products on the Swedish market. Primary brands include General snus, Longhorn moist snuff, White Owl cigars, Red Man chewing tobacco, Fiat Lux matches, and Cricket lighters.
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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