Cambi (Buy, TP: NOK19.00) - Optimistic on order outlook

Q3 EBITDA of NOK68m was NOK7m above our estimate on higher conversion of backlog. We believe the company looks well positioned for new orders on the strong market growth, most notably in the UK, with a new five-year water infrastructure investment cycle due to commence in 2025, where the budget is up 73% from the previous cycle. We reiterate our BUY and NOK19 target price, and find the stock attractively valued on 2024–2026e EV/EBITDAs of 9.3–8.5x.

Cambi Minor model adjustments

We have updated our estimates ahead of Cambi’s Q3 report (due on 7 November). We forecast EBITDA of NOK61m, reflecting slightly lower backlog execution than in Q2. We do not consider these changes to be material, and we have not changed our BUY recommendation. We reiterate our NOK19 target price. We view the valuation as attractive, at a 2025–2026e EV/EBITDA of 9.6–9.3x, well below waste management and recycling peers at ~13–11x.

Cambi (Buy, TP: NOK19.00) - Limited effect from CEO transition

Cambi reported solid Q2 results on high project execution, but we have lowered our 2024e EBITDA by 4% based on reported backlog distribution. However, the main headline is that the CEO is stepping down with immediate effect, with founder and majority owner Per Lillebø acting as interim CEO. Given his deep knowledge about the company, we do not see any material effects on operations from the CEO transition. We reiterate our BUY, but have cut our target price to NOK19 (20) on slightly lower estima...

Cambi (Buy, TP: NOK20.00) - Activity uptick seen in Q2e

We expect increased activity for the rest of the year and forecast Q2 EBITDA of NOK65m. We find the stock attractively valued, trading at a 2024–2025e EV/EBITDA of ~8x, well below its waste management and recycling peers at ~12x. We believe the share price still does not reflect our expected uptick in activity and increase in aftermarket activity with more THP plants becoming operational. We reiterate our BUY and NOK20 target price.

Cambi (Buy, TP: NOK20.00) - Preparing for higher activity

We consider the project delays in Q1 a bump in the road, and expect the business case to remain strong on increasing awareness and commercial interest for thermal hydrolysis, and an expanding pipeline of potential projects, supported by a backlog with 40% in the engineering phase set to enter manufacturing this year. We reiterate our BUY and NOK20 target price, and find the stock attractive at 2024–2025e EV/EBITDAs of 8.5–7.9x, versus its waste management and recycling peer group at ~12x.

Cambi Minor model adjustments

We have updated our estimates ahead of Cambi’s Q1 report, due on 7 May. We forecast EBITDA of NOK64m and a cash position of NOK383m. Our modelled order intake is NOK298m, primarily reflecting announced orders in Hawaii and Norway. We do not consider these changes to be material, and have not changed our BUY recommendation or NOK20 target price.

Cambi (Buy, TP: NOK20.00) - Investment case intact

Q4 EBITDA was NOK59m, NOK14m below our NOK72m forecast due to bonus accruals not included in our estimates. Despite slow order intake (book-to-bill of 0.2x), the backlog coverage was decent at 78% for 2024e, 53% for 2025e and 30% for 2026e (excluding soil sales), but implies additional backlog is needed to maintain current activity. We reiterate our BUY and NOK20 target price, and find the stock attractive at a 2024–2025e EV/EBITDA of 8.8–8.6x versus its waste management and recycling peer group...

Cambi (Buy, TP: NOK20.00) - Order outlook in focus

We expect Cambi’s high activity to continue and forecast Q4 EBITDA of NOK72m. After a few quarters with very strong order intake, Cambi did not announce any orders in Q4. Thus, we believe investor focus will be centred around the outlook for the new orders needed for the current high activity to be sustained beyond 2024e. We reiterate our BUY and NOK20 target price, corresponding to a blended average 2024–2025e EV/EBITDA of 12x, and see the stock as attractive at ~10x versus its waste management...

Cambi (Buy, TP: NOK20.00) - Strong backlog coverage

Cambi reported another solid quarter in Q3, with EBITDA of NOK70m (23% above our estimate) and record-high order intake. We see strong backlog coverage for the years ahead, with 73%, 60% and 50% of our estimates for 2024, 2025 and 2026 covered by secured backlog. We reiterate our BUY and NOK20 target price, corresponding to a blended average 2023–2024e EV/EBITDA of 12x, and see the stock trading at attractive 2023–2024e EV/EBITDAs of ~8x, well below its waste management and recycling peer group ...

Cambi (Buy, TP: NOK20.00) - Activity shift not priced in

After a couple of years with soft order intake, Cambi has seen a dramatic shift, with more than NOK1.2bn of announced orders YTD. Following the recent strong order intake and a change of analyst, we have raised our 2023–2025e EBITDA by 69–77%. We reiterate our BUY and have increased our target price to NOK20 (12) on higher estimates, corresponding to a blended average 2023–2024e EV/EBITDA of 12x. In our view, the stock does not reflect the significant uptick in activity, trading at attractive 20...

Cambi (Buy, TP: NOK12.00) - Tailwinds continue

The Q1 results were strong, with higher EBITDA than in all full years since at least 2015, significantly de-risking our estimates on strong revenue growth from 2022. With a backlog of NOK1.1bn and an outlook for continued solid order intake, we believe the stock should attract more attention. We have upgraded to BUY (HOLD) and raised our target price to NOK12 (9) on the encouraging Q1.

Northern Lights

Cambi (Hold, TP: NOK9.00) - Time for a pause

With strong share price performance YTD, especially since its Q4 report, we find the shares fairly valued using a 2023e EV/EBITDA of 13x. While we see a fair value potential to NOK13/share if using 2024e, we would like to see some confirmation on this year’s estimates before emphasising 2024e and onward, as our 2023e revenues imply 54% YOY growth and 2024e another 18%, despite strong order intake in 2022e having significantly de-risked our forecasts. Thus we have downgraded to HOLD (BUY) but rei...

Northern Lights

Northern Lights

Cambi (Buy, TP: NOK9.00) - Long-awaited start of tailwinds

Cambi reported solid Q4 results, well above our estimates. Although this was somewhat timing related, based on faster project execution than we expected, we believe this marked the start of tailwinds following several disappointing quarters. The report also increased our confidence in our 2023 estimates, with Cambi’s 2023–2024 equipment order intake target raised by ~NOK300m (on a like-for-like basis). We reiterate our BUY and have increased our target price to NOK9 (8) based on a 2023e EV/EBITD...

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Cambi (Buy, TP: NOK8.00) - Tailwinds ahead

We believe Q4 could mark the start of strong revenue and earnings growth QOQ for the next few quarters. We see a continued strong backlog build, with NOK490m–590m in announced equipment order intake lifting the backlog to above NOK1bn in Q4e. We reiterate our BUY and have increased our target price to NOK8 (7) on estimate revisions.

Northern Lights

Cambi (Buy, TP: NOK7.00) - At the tipping point

Cambi continues to post solid order intake, increasing its backlog from NOK544m in Q2 to cNOK1bn based on end-Q3 and the two contract awards in Q4. We believe the recent backlog build has been somewhat overlooked by the market but expect that likely solid revenue growth and thus a likely turn to profitability next year could attract more attention to the stock. We reiterate our BUY and NOK7 target price.