Veoneer (Buy, TP: SEK155.00) - Taking action to protect liquidity
Veoneer’s Q1 results demonstrated solid execution on cost and cash flow control despite a difficult LVP backdrop. We have cut our 2020–2022e sales by 7%, but also our FCF burn by 23%, which means we no longer include a recapitalisation in our forecasts. We reiterate our BUY, with a raised SEK155 (145) target price, as we see an undemanding valuation, lower financial risk, and a large re-rating opportunity in late 2020e or 2021e, when we expect Veoneer to show that its 20%+ sales growth opportunity is at a turning point.
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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