Valmet (Buy, TP: EUR23.00) - Risks, but overall well-positioned
We have cut our 2020e EPS by 13% but left 2021– 2022e unchanged on average due to coronavirus-related equipment delivery, service and automation challenges, and delays to ordering decisions. We believe Valmet is in a strong position to weather the turmoil and its hard-hit shares have significant rerating potential. We reiterate our BUY recommendation with a EUR23 (27) target price.Co. is a holding company. Through its subsidiaries, Co. is a supplier of paper and board machines, and process automation systems. Co.'s operations are divided into five segments: paper and board machinery, which makes paper, board and finishing machines; converting equipment, which supplies machinery for the packaging and printing industries; automation, which makes applications and solutions used for the measurement, control and information management of industrial processes; power transmission, which makes industrial gears and hydraulic motors, and automotive, which specializes in the production of cars.
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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