Axactor (Buy, TP: NOK6.80) - Abating interest rate pressure

We forecast Q1 pre-tax profit of EUR7m, down YOY, due to higher financing costs, although interest rates have stabilised since end-Q4. Somewhat softer collections from non-performing loans (NPL) and third-party (3PC) should lead to total income 3% lower YOY. We expect gradually increasing investments, with total volumes above replacement in 2024. We have made limited estimate revisions for 2025, and we reiterate our BUY and NOK6.80 target price.

Axactor (Buy, TP: NOK6.80) - Aiming high for 2026

Axactor reported strong Q4 EBIT of EUR32m, up 11% YOY driven by higher income from the NPL and 3PC segments, in addition to improved opex. As part of its new financial targets for 2026, Axactor is aiming for an ROE of 12% while maintaining an ambition of a 20–50% dividend payout. As NPL portfolio prices have yet to fully reflect the rising interest rates, Axactor aims for EUR100m–200m in annual investments. We have cut our 2024–2025e EPS by 3–5% on the outlook for somewhat lower collections, but...

Axactor (Buy, TP: NOK6.80) - Expecting solid 2023 performance

We expect a continued solid NPL collection performance to result in Q4 EBIT of EUR31m, up 9% YOY. In line with the guidance, we forecast 2023 NPL investments of EUR122m, enough to keep ERC stable going into Q4. We expect improved margins after having exited the third-party collections (3PC) segment in Sweden and Finland, offsetting lost volumes. We have raised our 2024–2025e EPS by 1–5% following the improved outlook for lower market interest rates, and reiterate our BUY and NOK6.80 target price...

Moody’s assigns a Baa1(hyb) rating to AXA SA’s Restricted Tier 1 Perpe...

Frankfurt am Main , January 11, 2024 Moody's Investors Service (Moody's) has today assigned a Baa1(hyb) rating to the resettable fixed rate restricted Tier 1 perpetual notes to be issued by AXA SA ("AXA", Insurance Financial Strength Rating of Aa3, stable outlook). The notes will be partially or fu...

AXA SA: Semi-annual update

Our credit view of this issuer reflects its high degree of business and geographic diversification, constrained by its relatively high level of goodwill and other intangible assets.

Axactor (Buy, TP: NOK6.80) - Managed risk through low season

Our Q3e PTP of EUR8m, down 41% YOY, reflects higher interest rates continuing to raise funding costs, offsetting increased collections and higher ERC. Having successfully placed a new NOK2.3bn bond in August and repurchased the January 2024 maturity ACR02 bond, we believe a key equity case risk has been addressed. Although we still need to see a ramp-up of higher-yielding NPL investments, we continue to find the shares attractively valued at a 2024e P/E of ~4.5x. We reiterate our BUY and NOK6.8 ...

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Axactor (Buy, TP: NOK6.80) - Addressing key funding risks

Axactor reported Q2 pre-tax profit 5% lower YOY as the higher interest rates continue to weigh on earnings through a higher cost of funding. Portfolio prices have yet to reflect higher rates, leading to the muted investment outlook. By planning to issue a new bond of NOK2bn, with support from the majority shareholder, we believe a key risk for the equity story is being addressed. We have made limited 2024–2025e EPS revisions and reiterate our BUY and NOK6.8 target price.

Axactor (Buy, TP: NOK6.80) - Expecting modest investment pace

We forecast Q2 PTP of EUR11m, down 27% YOY despite 11% higher ERC, reflecting continued pressure on funding costs from a 3.7%-point YOY increase in the EURIBOR. We expect still-modest investments, as portfolio prices have yet to fully factor in the new rate environment, further affecting gross revenue growth. We still expect investments to be towards the higher end of the EUR100m–150m guidance for 2023. Nonetheless, we reiterate our BUY but have lowered our target price to NOK6.8 (7.0), while we...

AXA SA: Semi-annual update

Our credit view of this issuer reflects its high degree of business and geographic diversification, constrained by its relatively high level of goodwill and other intangible assets.

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Axactor (Buy, TP: NOK7.00) - Looking to refinance bond

Q1 gross collections were EUR83m, up 5% YOY but negatively affected by the 98% collection performance, offsetting part of the 12% YOY growth in remaining collections (ERCs). Although a lawyers’ strike in Spain hurt collections, part of the underperformance was from customers being granted delayed payment, which also led to lower amortisations, boosting net revenues. Axactor is aiming to refinance its ACR02 bond in Q2 or Q3, and is assessing alternatives (bond markets, bank financing or private d...

Axactor (Buy, TP: NOK7.50) - Set for investment discipline

We forecast Q1 cash EBITDA of EUR57m, 7% higher YOY, driven primarily by 12% YOY growth in ERC following the gradual investment ramp-up during 2022. Having reached an agreement with its banks on the RCF renewal, the funding risk involved with the upcoming ACR02 bond maturity (12 January 2024) has been mitigated further. At a 2024e P/E of below 5x, we continue to find the stock attractively valued and reiterate our BUY and NOK7.5 target price.

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Moody’s assigns an A2(hyb) rating to AXA’s Tier 2 notes

Frankfurt am Main , April 5, 2023 – Moody's Investors Service ("Moody's") has today assigned an A2(hyb) rating to dated subordinated notes due 2043 to be issued by AXA SA ("AXA", rated Aa3 for insurance financial strength and A1 for senior unsecured debt, outlook stable) under its €20 billion EMTN p...

Axactor (Buy, TP: NOK7.50) - Addressing funding risk

Axactor’s strong collection momentum continued in Q4 following the pre-announced investment volumes of EUR288m for 2022. Q4 gross revenues were EUR89m, up 15% YOY excluding the discontinued real estate owned (REO) segment. As interest rates are still creating uncertainty for new portfolio prices and an upcoming bond refinancing, management continues to focus on capital discipline and deleveraging. We have raised our 2023–2024e EPS by 2–3% and reiterate our BUY and NOK7.50 target price.

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Axactor (Buy, TP: NOK7.50) - Reducing refinancing risk

Axactor has initiated a set of financial targets for 2023 and beyond, focusing on profitability, investment capacity and shareholder returns. Its 9% ROE for 2023 was not far from 2023–2024 consensus but was announced along with planned 2023 investments of EUR100m–150m, a sharp reduction from EUR288m in 2022. This seems partly driven by portfolio prices not fully reflecting increased funding costs, but also to leave some headroom for the upcoming EUR170m bond maturity. Although we have cut our 20...

Axactor - ROE uplift at a very attractive valuation

Expect ROE to improve from -9% in ’21 to ~11% in ‘24e… …due to higher IRR, strong NPL supply and low C/I P/E '23e 4.8x, EV/EBIT 9.6x, 39% & 11% disc. to peers

Axactor - Terminating coverage

ABGSC ceases coverage of Axactor… …due to the end of the contractual period Last published estimates are shown in this report