Renewable Weekly – 29 April 2024

This week, we summarise our Q1 previews for the sector.

Elmera Group (Sell, TP: NOK21.00) - Watts up

We expect the Q1 results to be in line with consensus, reflecting improvements in Nordic and New Growth Initiatives (NGI), while we expect Consumer and Business to be flat YOY. While Elmera Group’s results seem to have stabilised and the risk of significant churn has been reduced, we continue to find the valuation stretched. We reiterate our SELL, but have raised our target price to NOK21 (20) on positive estimate revisions.

Elmera Group (Sell, TP: NOK20.00) - Consumer and guidance miss

Slightly soft Q4 results included adj. EBIT below our estimate and higher 2024–2025 cost guidance than expected. We reiterate our SELL, but, despite lowering our 2024–2025e EPS by 2.6–1.4%, we have raised our target price to NOK20 (16), as we have rolled forward our valuation multiples to 2025e.

Elmera Group (Sell, TP: NOK16.00) - Mixed report

We consider this a mixed report for Elmera Group, including Q4 adj. EBIT slightly below expectations, DPS above, and 2024–2025 cost guidance slightly above our forecast. We expect 1–3% negative revisions to consensus 2024e adj. EBIT on the report and believe a slightly negative share price reaction is warranted.

Elmera Group (Sell, TP: NOK16.00) - Consumer margin set to recover

We expect the Q4 results to beat consensus, reflecting a strong recovery in the Consumer margin, supported by higher volumes and prices and still-limited churn in the market. However, we reiterate our SELL, as we continue to find the valuation stretched and question the sustainability of the business model, but have raised our target price to NOK16 (15) after raising our estimates.

Elmera Group (Sell, TP: NOK15.00) - Watt’s up with margins

Elmera Group reported a weak Q3, with the consumer and business margins hitting record lows. We continue to question the sustainability of Elmera Group’s business model due to its high costs and believe the current low churn, despite significant price increases in the quarter, could prove temporary, as prices are now significantly above leading-edge levels. We reiterate our SELL and NOK15 target price.

Elmera Group (Sell, TP: NOK15.00) - Weak underlying figures

We consider this a soft report for Elmera Group, including adj. EBIT in line, but helped by a significant one-off in NGI related to the Mobile network migration while both the consumer and business segments were below expectations. We expect 2% negative revisions to consensus 2023e EBIT on the report and believe a negative share price reaction is warranted.

Elmera Group (Sell, TP: NOK15.00) - Weak Q3 expected

We expect a weak Q3 from Elmera (results due at 07:00 CET on 2 November) as the lower share of variable spot contracts continues to hurt the Consumer segment, and low electricity prices have reduced margins from hedging products in the Business segment. We reiterate our SELL and NOK15 target price.

Elmera Group (Sell, TP: NOK15.00) -

Just a power surge We maintain our cautious view on Elmera as we believe the Q2 results confirmed the Consumer business is facing structural challenges, and we are circumspect about the earnings beat from the Nordic segment given its historically weak track record. We reiterate our SELL and NOK15 target price.

Elmera Group (Sell, TP: NOK15.00) - Current model looks unsustainable

We reiterate our SELL and NOK15 target price ahead of the Q2 results (due at 07:00 CET on 17 August). Despite less intense competition in Consumer, we expect a soft margin in the segment, reflecting the phase out and a seasonally weaker contribution from the highly profitable variable contracts.

Northern Lights

Northern Lights

Elmera Group (Sell, TP: NOK15.00) - Harvesting variable customers

Elmera’s Q1 results were strong, driven by solid margins in the Consumer segment supported by extraordinarily high margins on variable contracts under phase-out. However, we still believe these earnings warrant low multiples and question the sustainability of the business model. We reiterate our SELL, but have raised our target price to NOK15 (11) on positive estimate revisions.

Elmera Group (Sell, TP: NOK11.00) - Q1 above

We consider this a positive report for Elmera Group, including figures above expectations driven by a margin recovery in the consumer segment supported by the phase-out strategy for variable products. We expect c10% positive revisions to consensus 2023e EBITDA on the report and a positive share price reaction.

Northern Lights

Elmera Group (Sell, TP: NOK11.00) - Q1 a likely breather

We expect Elmera’s Q1 report to be above consensus as the intense competition in the Consumer segment seems to have eased somewhat due to falling electricity prices. We have raised our target price to NOK11 (10) on positive estimate revisions but reiterate our SELL as we continue to question the medium-term outlook for the business model.

Northern Lights

Elmera Group (Sell, TP: NOK10.00) - Electric shock

The Q4 report was weak including soft results, a significant restating of historical figures, and a withdrawal of the 2023 guidance. We reiterate our SELL and have cut our target price to NOK10 (12) on the back of significant estimate reductions to the consumer business, reflecting the soft out-phasing of the lucrative variable contract business.

Elmera Group (Sell, TP: NOK12.00) - Q4 weak, withdrawal of guidance

We consider this a weak report for Elmera Group, including figures below expectations and a withdrawal of the 2023 guidance provided with the Q4 profit warning. We expect 5% negative revisions to consensus 2023e EBIT on the back of the report and believe a negative share price reaction is warranted.

Elmera Group (Sell, TP: NOK12.00) - Losing Power

Following the significant profit warning in late December, we expect Elmera to report a neutral set of Q4 results. Key focus will be on the outlook for 2023 and how it aims to deliver on its lowered FY guidance in an already challenging market facing significant headwinds. We reiterate our SELL and cut out target price to NOK12 (13). You have been warned. We forecast a Q4 EBIT of NOK49m, versus consensus of NOK111m. Our forecast reflects a NOK25m EBIT loss in the consumer segment, in line with t...