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...

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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.

Cambi (Buy, TP: NOK7.00) - Time to convert backlog to revenues

With Cambi having delivered more slowly on its projects than it expected so far in 2022 and its backlog continuing to build, we believe the company is set for strong revenue growth in 2023e. However, given its previous revenue misses, we expect management to remain cautious and continue to provide guidance only on expected order intake for 2022–2024 rather than on revenue for 2023. We reiterate our BUY but have cut our target price to NOK7 (8).

Northern Lights

Cambi (Buy, TP: NOK8.00) - Confirmation of recent progress

The company is progressing on its order intake target of NOK1bn in 2022–2023 and NOK1.7bn by 2024, with ~NOK300m already awarded and ~NOK465m related to announced projects but not included in backlog. Given the progress in its DBO project as well, which could result in exclusive negotiations by end-2022 and visibility for multiple contract awards in the coming months, we see several positive potential news stories for the name. We reiterate our BUY and NOK8 target price.

Cambi (Buy, TP: NOK8.00) - Delivering on contract awards

The company has seen solid equipment contract awards recently (totalling NOK360m–370m in Q2–Q3e), further de-risking our estimates and its NOK1bn target by end-2023. However, we believe focus is on near-term earnings in the current market. We reiterate our BUY, but have cut our target price to NOK8 (12), corresponding to a 2022–2023 EV/EBITDA of 13x on our estimates.