Tomra (Sell, TP: NOK95.00) - Valuation does not reflect risks
We estimate Q2 EBITA at EUR43m (results due at 07:00 CET on 19 July), representing a YOY increase in Collection, while Recycling and Food’s order intake in previous quarters suggests a YOY EBITA decline for Q2. We have made minor estimate changes. Note that the company will change its reporting currency to EUR from Q2. We reiterate our SELL and NOK95 target price, as we believe the 2024 P/E of 38x does not account for the risk that Food and Recycling may continue to struggle and that the market’s expectation for a DRS implementation in the rest of Europe could be further delayed or scrapped.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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