Orkla ASA: 1 director

A director at Orkla ASA bought 20,000 shares at 82.100NOK and the significance rating of the trade was 53/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly sho...

Swedish food retail market: flat in April

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

US shale: limited growth expected

Our Q1 survey of the US shale universe showed limited revisions to guidance for 2024, and we still expect muted 2024 production growth of ~4% YOY (+8% YOY in 2023). The companies now expect fewer tailwinds from cost deflation, primarily due to operational efficiencies. Our survey also suggested capex down ~2% YOY, as companies guide for flat activity. For Q1, our universe spent 102% of its operating cash flow, split c50/50 capex and shareholder distributions.

Weekly Real Estate Matrix

Performance and valuation data for Nordic real estate stocks as of 10 May 2024.

Swedish policy rate cut, an upgrade and a downgrade

Sweden’s Riksbank cut the policy rate this week to 3.75% (4.0%); our estimates are based on another four cuts by end-2025. During the week we upgraded Veidekke to BUY, downgraded Castellum to HOLD, and reiterated our HOLD on Kojamo and SELL on Hufvudstaden and Sagax. The average implied EBITDA yields on the stocks we cover are 4.40% for 2024e and 4.79% for 2025e.

Weekly news, topics & discussion

Key takeaways from this week are: 1) BlueNord’s Q1 figures were in line with our estimates, and due to technical issues, the Tyra plateau ramp-up was prolonged to mid-Q4 (2024 production guidance reduced from >40kboed to ~35kboed); 2) DNO’s Q1 report showed net production slightly above consensus, and it announced it has acquired stakes in five fields in the Norne area from Vår Energi, adding ~3kboed of net production near-term; and 3) Panoro Energy’s Q1 trading update showed net production of 9...

Odfjell SE (Buy, TP: NOK225.00) - Bullish earnings outlook

We have raised our Chemical Tankers rate estimates on the c7% increase QOQ in Q1 and with expectations for further growth in Q2, supported by an outlook for improved chemical production and limited supply ahead. We estimate a double-digit dividend yield through 2026e despite a modest payout ratio, and believe Odfjell screens as an attractive exposure to the tanker segment at an average 2024–2025e EV/EBITDA of 3.7x, versus the broader tanker peer group at 4.5x. We reiterate our BUY, and have rais...

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

Alligator Bioscience (Buy, TP: SEK1.10) - OPTIMIZE-1 needs more patien...

In connection with its Q1 report, Alligator Bioscience reported that the FDA wants to see more data from the low-dose cohort in OPTIMIZE-1 (15 more patients and recruitment has already started). This is due to Project Optimus within the FDA, and PK/PD data from the low-dose cohort should be available in Q1 2025. There is a risk that this added uncertainty could delay partnering discussions for mitazalimab, we believe. We reiterate our BUY but have cut our target price to SEK1.10 (1.50).

Otovo (No_rec, TP: NOK) - Clouds still on the horizon

Needing to increase its activity meaningfully to cut its cash burn, soft order intake in Q1 leaves us concerned. With market prospects remaining weak, we consider one of the three following outcomes as likely: 1) a full take-over by the majority owners to restructure the company; 2) a sale to an industrial company; or 3) the stock remaining listed and existing owners carrying out a rights issue, resetting the equity value. With high uncertainty and a broad set of potential outcomes for the curre...

Weekly Real Estate Matrix

Performance and valuation data for Nordic real estate stocks as of 3 May 2024.

Comeback kickoff

Q2 better on margins and volumes; earnings mix also strong. Further improvement in coming quarters on margin recovery. Record-low valuation: P/E 12-13x, SOTP at NOK 107/share.

Orkla (Hold, TP: NOK81.00) - Signs of light

Orkla’s Q1 results were slightly above consensus, with positive developments in volume and gross margin. Nevertheless, we reiterate our HOLD and NOK81 target price, as we continue to find the valuation fair, and we have made only minor estimate revisions.

Weekly news, topics & discussion

This week, we published a note on Aker BP highlighting our growing concerns of sharp cuts to consensus FCF, with capex assumptions beyond 2026 looking far too low to us – we are ~40% below consensus on 2027–2030e FCF. As well as BW Energy’s Q1 trading update revealing net production just below our estimate, it announced a sale & leaseback agreement, which we see as marginally accretive to our NAV. In other news, we believe the Tyra ramp-up will be in focus in BlueNord’s Q1 results, due next week

Q1 reporting continues

This week, Castellum and Balder reported Q1 results, Wihlborgs announced a new lease, and SBB corrected 2023 profits and dissolved Unobo. Norges Bank has signalled interest rates might stay higher for longer. K2A has halted preference dividend payments. The weighted-average implied EBITDA yields on the stocks we cover are 4.69% for 2024e and 4.97% for 2025e.

Orkla (Hold, TP: NOK81.00) - Q1 slightly above consensus

We consider this a slightly positive report, including figures above consensus on higher-than-expected organic growth, a slight contribution-margin improvement, and no significant change in outlook. We expect 1–2% positive revisions to consensus 2024e adj. EBIT, and believe a slightly positive share price reaction is warranted.

Aker BP (Buy, TP: NOK290.00) - Capex concerns looming

While investor concerns appear tilted towards a near-term production decline, we are increasingly concerned that consensus FCF will face meaningful negative revisions, as capex assumptions beyond 2026 look far too low. For 2027–2030, our FCF estimates are ~40% below consensus. We reiterate our BUY, but have cut our target price to NOK290 (325) on a lower fair P/NAV.

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

Yard response and dry bulk qualms

Our trip to South Korea and China revealed Chinese shipbuilders are seeking growth to take on Korea’s established yards who are facing constraints. An eagerness to add capacity is one of our takeaways, as well as a gloomy outlook for Chinese real estate, which in our view should inevitably weigh on dry bulk demand.