Wärtsilä (Buy, TP: EUR22.00) - Weak core, strong non-core
Following softer clean EBIT and orders in core Marine and Energy than we expected in Q3, partly offset by a stronger non-core portfolio, we have cut our 2024–2026e clean EBIT by c4% on average (core c-5%, non-core c+40%). We reiterate our BUY, but have slightly lowered our target price to EUR22 (23).Wartsila provides lifecycle power solutions for the marine and energy markets. Co.'s operations can be divided into three segments: Power Plants, in which Co. is a supplier of flexible baseload power plants of up to 600 MW operating on various gaseous and liquid fuels; Ship Power, in which Co. is a provider of products and integrated solutions such as medium-speed diesel and gas engines, low-speed engines, propulsion systems and gears, and seals and bearings; as well as Services, in which Co. supports its customers throughout the life cycle of their installations and provides services including spare parts to operational and maintenance service for both the energy and marine markets.
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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