Tomra (Sell, TP: NOK75.00) - The top line grows, but not EPS
We reiterate our view that Tomra’s price reflects too-lofty earnings growth expectations and highlight that earnings growth has been absent in recent years in spite of an expanding top line. Tomra’s EPS declined by ~6% in 2022 and we estimate a further decline in 2023 (particularly driven by a soft EBITA contribution in Food in 2023). We have reduced our 2024–2025e by ~2% on slightly lower order intake expectations from Recycling. We reiterate our SELL and NOK75 target price.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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