Sats (Buy, TP: NOK21.00) - Yields trump membership growth

Despite being marginally below consensus for Q1e, we are positive ahead of the report as we believe it should provide yet more evidence that SATS is on track to deliver on its medium-term targets to improve profitability. We reiterate our BUY and NOK21 target price, having made slight positive estimate revisions, as we continue to find the valuation attractive.

SATS - Lean and healthy

SATS continues manifestly to deliver on its strategy of premiumisation with currency adjusted membership revenue up 11% in Q423 (15% for the full year) and assurance of ‘significant unleashed potential’ within the existing estate in terms of capacity utilisation and membership yield. Operating leverage, complemented by tight cost control (Q423 currency adjusted opex down 2%) and minimal expansionary capex for the time being, provides scope for lucrative marginal revenue growth (Q423 EBITDA up te...

Sats (Buy, TP: NOK21.00) - Profitability improvement on track

We believe the Q4 report confirmed SATS is on track to improve its existing platform’s profitability through increased memberships, higher yields and good cost control. We have upgraded the stock to BUY (HOLD) and raised our target price to NOK21 (16) on our positive estimate revisions.

Sats (Hold, TP: NOK16.00) - Strong Q4 report

We consider this a positive report for SATS, including better than expected Q4 results and a membership base slightly above expectations. We expect 3–5% positive revisions to consensus 2024e EBITDA and believe a positive share price reaction is warranted.

Sats (Hold, TP: NOK16.00) - From member freeze to squeeze

We are neutral on SATS ahead of its Q4 results, expecting EBITDA to miss consensus, and a slight decline in memberships QOQ on increased churn. As a result, we have downgraded the stock to HOLD (BUY), but raised our target price to NOK16 (14) as peer valuations have expanded, valuing the stock at a 2024e P/E of 13x, broadly in line with Nordic retail peers.

Sats (Buy, TP: NOK14.00) - Fitness reboot

The Q3 results confirmed that the company’s strategy to increase utilisation at existing clubs has paid off. However, investors continue to question the resilience of its business model, and the guidance for a drop in memberships in Q4 QOQ added limited near-term support. We reiterate our BUY, but have kept our NOK14 target price despite slight estimate increases.

Sats (Buy, TP: NOK14.00) - Strong results

We consider this a positive report for SATS, including figures above expectations, strong membership growth, no change to guidance, and confirmation that the deleveraging is on track. We expect 2–4% positive revisions to consensus 2023e EBITDA and believe a positive share price reaction is warranted.

Sats (Buy, TP: NOK14.00) - Q3e EBITDA above consensus

We are positive ahead of the Q3 results (due at 07:00 CET on 26 October), which we expect to be slightly above consensus and confirm that SATS has finally restored its financial position, with an NIBD-to-EBITDA ratio below its bank covenant. We reiterate our BUY and NOK14 target price.

Northern Lights

Sats (Buy, TP: NOK14.00) - Back on track

SATS’s Q2 results confirmed that the revised strategy is on track to restore profitability. We have upgraded to BUY (HOLD) and raised our target price to NOK14 (12), as we find the stock increasingly attractive post positive estimate revisions.

Sats (Hold, TP: NOK12.00) - Summer lull

Our Q2e EBITDA is 7% above consensus, driven by a likely continuation of the positive revenue trend seen in Q1, partly offset by seasonally slower membership growth. Nevertheless, we have downgraded to HOLD (BUY) as we find the valuation fair, with the stock now trading close to our unchanged NOK12 target price.

Northern Lights

Sats (Buy, TP: NOK12.00) - Getting back in shape

SATS reported Q1 results above our forecasts, with a higher than expected membership base, and lower costs. We have upgraded the stock to BUY (HOLD) and raised our target price to NOK12 (8), reflecting positive estimate revisions and an improved outlook.

Sats (Hold, TP: NOK8.00) - Strong Q1

We consider this a positive report for SATS, including figures above expectations and a higher-than-expected membership base. We expect a c10% positive revision to consensus 2023e EBITDA and believe a positive share price reaction is warranted.

Sats (Hold, TP: NOK8.00) - Time for (covenant) testing

We are above consensus ahead of the Q1 results, due at 07:00 CET on 26 April. We find it positive that SATS looks to be taking significant action to restore profitability, including raising prices, scaling back club growth and reducing overheads. However, as it has not been transparent on near-term covenants, we find it hard to quantify the financial risk. We reiterate our HOLD and NOK8 target price.

Northern Lights

Sats (Hold, TP: NOK8.00) - Trimming costs

Q4 results were weak, but the membership growth surprised positively, which combined with lowered club expansions and reduced HQ costs, should gradually help to restore profitability by 2024e. We reiterate our HOLD and NOK8 target price.

Sats (Hold, TP: NOK8.00) - Mixed Q4 report

We consider this a mixed report, including figures below expectations badly hit by one-off costs, a slightly higher membership base and a temporary pause in further club expansion. We expect 2% negative revisions to consensus 2022 EBITDA and minor changes to 2023. We believe a neutral share-price reaction is warranted.

Sats (Hold, TP: NOK8.00) - Lukewarm Q4e, but signs of action

We remain lukewarm ahead of the Q4 results, expecting weak results and significant one-off costs. However, electricity prices have eased somewhat and SATS looks set to take action to align its cost base to the bleak outlook and improve profitability. We reiterate our HOLD but have raised our target price to NOK8 (7) on the recent market revaluation.

Sats (Hold, TP: NOK7.00) - Lower near-term growth ambitions

SATS’ Q3 results were soft, but membership growth was better than expected. Looking ahead we welcome the reduced near-term club expansion strategy but notice that 13 clubs are already committed. SATS’ ability to pass on cost inflation to customer remains questionable as evident by significant campaign activity in Q3 to support membership growth. We reiterate our HOLD and NOK7 target price.