XXL (Buy, TP: NOK22.00) - Soft Q3 expected
We are slightly below consensus EBITDA ahead of the Q3 report (due at 07:00 CET on 28 October). We forecast slightly lower revenues YOY as we expect the reversal of positive pandemic effects to continue into Q3 (as seen in Q2), but on still-strong gross margins since prices have held up well in most markets. We reiterate our BUY, but have cut our target price to NOK22 (25), on lower estimates and the recently paid NOK1 DPS.XXL ASA, formerly known as Megasport AS, is a Norway-based retailer of sporting goods. The Company offers a portfolio of products including clothing, shoes, bicycles, wilderness products, sports equipment, training supplies and equipment, lifestyle and wellbeing products, fishing and hunting equipment, dog toys and accessories, riding clothing and accessories, as well as clothing, equipment and accessories for winter sports. Additionally, it offers services such as bike repair and maintenance, hunting excursion and courses, fishing trips, riding holidays, and dog training. The Company operates via around 40 stores, primarily in Norway but also in Sweden and Finland, and via an e-commerce platform.
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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