Tomra (Sell, TP: NOK140.00) - Margins continue to limp
Q4 EBITA of NOK496m was in line with our estimate, but beat consensus by 3%. However, we consider it a low-quality beat, driven by a stronger than expected Food result. Although Collection sales were 4% above our estimate and consensus, EBITA was 6% below our forecast and 1% below consensus. Cost inflation looks set to continue in Collection in 2023. Our 2023–2024e EPS are largely unchanged and we reiterate our SELL and NOK140 target price. We continue to believe the 2023e P/E of ~39x has decoupled from Tomra’s fundamentals.Tomra Systems is a creator of sensor-based solutions for optimal resource productivity within the business streams of reverse vending, material recovery, compaction, recycling, mining, and food. Co.'s operating structure comprises two business areas and six business streams. The TOMRA Collection Solutions businesss area consists of three business streams: reverse vending, material recovery, as well as compaction. The TOMRA Sorting Solutions, business area consists of three business streams: food, recycling, and mining.
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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