VEF (No_rec, TP: SEK) - Mixed signals
VEF marked down its portfolio by 13% QOQ in Q3, putting YTD NAV growth at 11% (in USD), still lagging behind its portfolio peers (up 20–80% in USD). Its share price is down 19% YTD, implying a 56% discount to a fairly conservative NAV. We believe too much focus is placed on balance sheet concerns; our impression is that investors are focused on the bond maturing in Q2 2025, which could drive VEF to strengthen its balance sheet in the next 12–24 months. We note VEF’s high-beta characteristics and expect a continued recovery in long-duration growth valuation multiples, should interest rates peak. We have updated our fair value to SEK3.6–6.0 (3.8–5.6).
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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