Norva24 (Buy, TP: SEK37.00) - German project headache

The Q3 results were mixed, with German governance issues clouding an otherwise solid performance. Now excluding the prohibited Norwegian Vitec acquisition combined with the German project business challenges, we have cut our 2024–2026e EPS by 3–10% and our target price to SEK37 (39). We reiterate our BUY, still seeing solid potential for a ‘buy-and-build’ sector roll-up case in the fragmented European UIM service market.

Norva24 (Buy, TP: SEK39.00) - Closing in on its financial targets

Norva24’s seasonally strong Q2 was solid, partly against easy comparables, but also showing the benefits of implemented actions. We see Norva24 closing in on its 2025 revenue target of NOK4.5bn. Adjusting for the timing and financial effects of recent acquisitions imply EPS changes of -4% for 2024e, +5% for 2025e and +6% for 2026e. Demand in the UIM service market remains strong, with Norva24’s model supporting a continued ‘buy-and-build’ sector roll-up. We reiterate our BUY and have raised our ...

Norva24 (Buy, TP: SEK37.00) - Improved acquisition conversion

A weak Q1 was hit by a negative working day impact that normalised in April, so January–April saw 7.1% organic growth YOY and EBITA margin gains YOY. Improved conversion of the acquisition pipeline is driving growth, with recent deals looking value-enhancing. We have raised our 2024–2026e EPS by 6–7%. Demand in the fragmented European UIM service market remains strong, with Norva24’s model supporting a continued ‘buy-and-build’ sector roll-up strategy. We reiterate our BUY and have increased our...

Norva24 (Buy, TP: SEK34.00) - Harsh winter a seasonal headwind

Q4 revenue growth was solid, but the EBITA margin and FCF generation were weaker than we forecast. We have only tweaked our EPS forecasts, reflecting FX, financials, and non-cash items. Demand in the fragmented European UIM service market remains strong, in our view supporting a financial model with the potential for a ‘buy-and-build’ sector roll-up. We reiterate our BUY and SEK34 target price.

Norva24 (Buy, TP: SEK34.00) - New CEO showing the way

The Q3 results were solid, with good organic growth and profit expansion, and the new CEO’s focus areas are harmonising with the 2025 targets. We have marginally raised our 2023–2025e EPS, with recent acquisitions offsetting higher financial costs. Demand in the fragmented European UIM service market remains strong, in our view supporting a financial model with the potential for a ‘buy-and-build’ sector roll-up. We reiterate our BUY and SEK34 target price.

Norva24 (Buy, TP: SEK34.00) - Profit margin trend lagging behind

Q2’s profit margin trend was below our forecast as Norva24’s capacity utilisation across its branch network was uneven, with improving FCF generation a partial mitigator. We have cut our 2023–2025e EPS by 8–10%, awaiting a reversal in the EBITA margin trend. Demand in the fragmented European UIM service market remains strong, supporting a financial model with the potential for a ‘buy and build’ sector roll-up. We reiterate our BUY, but have cut our target price to SEK34 (42).

Northern Lights

Norva24 (Buy, TP: SEK42.00) - Solid start to 2023

The Q1 results were solid, with strong revenue growth and profit margin expansion, while FCF generation still lagged behind in the seasonally small quarter. We have raised our 2023e EPS by 4% and our 2024–2025e by 2% on the Oslo acquisition and FX. Demand fundamentals in the fragmented European UIM service market appear strong, supporting an attractive financial model with the potential for a ‘buy and build’ sector roll-up (seven acquisitions completed LTM). We reiterate our BUY and SEK42 target...

Northern Lights

Norva24 (Buy, TP: SEK42.00) - Still moving towards 2025 targets

Q4 revenue growth was solid, but the EBITA margin and FCF generation were weaker than we forecast. We have only tweaked our EPS forecasts post-report, with recent acquisitions offsetting underlying weakness. Demand fundamentals in the fragmented European UIM service market look strong, supporting an attractive financial model with potential for a ‘buy-and-build’ sector roll-up (seven acquisitions completed LTM). We reiterate our BUY and have raised our target price to SEK42 (38), extending our v...

Northern Lights

Norva24 (Buy, TP: SEK38.00) - On track to meet its 2025 targets

Organic growth in Q3 was solid, expanding the EBITA margin and improving FCF generation YOY. Recent acquisitions seem to have been completed at very appealing valuations and are the main driver of our 8–9% forecast EPS rise for 2023–2024. Demand fundamentals in the fragmented European UIM service market seem strong in and outside Norva24’s footprint, supporting an attractive financial model with potential for a ‘buy-and-build’ sector roll-up, with six acquisitions completed YTD. We reiterate our...

Norva24 (Buy, TP: SEK38.00) - Solid roll-up case emerging

Norva24 reported a mixed Q2, with solid organic growth and weaker profit and FCF generation than forecast, but with most of the shortfall seemingly of temporary (timing) nature. Demand fundamentals in the fragmented European market seem supportive in and outside Norva24’s footprint, supporting an attractive financial model with reinvestment potential in a ‘buy-and-build’ sector roll-up, with four acquisitions completed YTD. We reiterate our BUY and SEK38 target price, and see a solid industrial ...

Northern Lights

Norva24 (Buy, TP: SEK38.00) - Nordstjernan enters as new owner

Norva24 reported a solid Q1, and we see an improving organic growth outlook for 2022e, complemented by the increasing acquisition pipeline. Demand fundamentals in the fragmented European market seem supportive in and outside Norva24’s footprint, creating an attractive financial model with reinvestment potential in a ‘buy-and-build’ sector roll-up. We reiterate our BUY and SEK38 target price, and see investment company Nordstjernan’s recent ownership as positive.

Norva24 (Buy, TP: SEK38.33) - Advanced discussion pipeline

Norva24 reported a solid Q4, and we see improving organic support in 2022e complemented by the company highlighting a strengthening acquisition pipeline. Demand fundamentals in the fragmented European market seem supportive in and beyond its current footprint, driving an attractive financial model with reinvestment potential in a ‘buy-and-build’ sector roll-up. We reiterate our BUY with a SEK38 (42) target price.

Norva24 - Initiation of coverage - Industrial roll-up opportunity

We believe Norva24 is poised to lead the roll-up of the underground infrastructure maintenance (UIM) service market in northern Europe. Demand fundamentals in the fragmented European market look supportive in and beyond its current footprint, driving an attractive financial model with high FCF-generation capacity. We initiate coverage with a BUY and SEK42 target price.