Valmet (Sell, TP: EUR15.00) - IFRS boost
We are slightly above consensus on headline items for Q1 (results due at 11:00 CET on 27 April), but in a seasonally weak quarter focus will be on order intake (we are 2% below consensus) and management’s short-term market outlook (we expect no change). We expect weaker margin expansion for 2018–2020e, due to lower earnings leverage and retainment of quality and procurement cost savings. We reiterate our SELL and EUR15 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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