Valmet (Sell, TP: EUR18.00) - Improved outlook priced in
We are 3% below consensus on Q3e EBITA (results due at 12:00 EET on 23 October). We believe the Pulp and Energy division will replace board and tissue as the primary sales growth driver in 2019–2020 – the weakest quality growth for Valmet. While we have lifted our target price to EUR18 (16.5) due to the improved outlook for pulp and marine scrubbers, in our view the all-time high valuation multiples more than capture the improved outlook for Pulp and Energy, and we reiterate SELL.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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