Trelleborg (Buy, TP: SEK140.00) - Enough is enough
We have been disappointed by Trelleborg’s performance in recent years, but believe the Q4 report was a clear step in the right direction, as the negative gross margin trend turned, sealing solutions’ performance improved, and Wheel Systems’ inventories are better balanced. Since then, the share price has fallen 48%, owing to coronavirus and investor concerns about the balance sheet. We have cut our forecasts by 10–20% and believe the balance sheet should prove more than sufficient. We have upgraded to BUY (HOLD) but with a lowered target price of SEK140 (180).Trelleborg AB provides engineered polymer solutions. Co. has five business areas: Trelleborg Coated Systems, which supplies solutions for polymer-coated fabrics; Trelleborg Industrial Solutions, which provides polymer-based solutions for industrial antivibration solutions and industrial sealing systems; Trelleborg Offshore & Construction, which supplies polymer-based solutions used in offshore oil and gas and infrastructure construction environments; Trelleborg Sealing Solutions, which supplies polymer-based sealing solutions deployed in general industry, light vehicle and aerospace environments; and Trelleborg Wheel Systems, which supplies tires and wheels for materials handling vehicles.
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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