Netel Group Holding (Buy, TP: SEK22.00) - Still in transition mode

Netel’s Q4 results met our expectations, with a solid order backlog entering 2025; however, FCF was weak, implying a high gearing. We still see sound medium-term demand fundamentals and expect Netel to re-establish its quality credentials with investors, but have reset our estimates towards recent performance, with 18–12% EPS cuts for 2025–2027. We forecast a return to healthy investment-grade financials and see an attractive risk/reward; reiterate our BUY and SEK22 target price.

Netel Group Holding (Buy, TP: SEK22.00) - Intending to sell Finnish op...

Netel announced it intends to dispose of its small and poor-performing Finnish operations to focus on the larger and more value-creating business. Its indicated 2024 performance was in line with our Q4 forecasts, and after deconsolidating Finland, we have cut our 2025–2026e EPS by 3–4%. We still see sound medium-term demand fundamentals and expect Netel to re-establish its quality credentials with investors. We reiterate our BUY but have lowered our target price to SEK22 (25).

Netel Group Holding (Buy, TP: SEK25.00) - Recovery taking one step bac...

Netel’s Q3 surprised on the downside and its “2024 indication” has prompted us to cut our 2024e EPS by 32% (2025–2026e cut by 7–5%). We still see sound medium-term demand fundamentals and expect Netal to re-establish its quality credentials with investors, while noting Q3 was a bump in the road. We reiterate BUY but have cut our target price to SEK25 (28.5), now offering c45% upside potential from the current share price.

Swedish Small and Medium Caps Cases

Swedish Small and Medium Caps Cases

Netel Group Holding (Buy, TP: SEK28.50) - Growth across all divisions

Netel’s Q2 results showed further good progress towards raising performance across its operations. The still-high gearing drives higher financial costs, lowering our 2024e EPS by 9% and 2025–2026e by 3% even as the operating forecast is broadly unchanged. We still see solid demand fundamentals and Netel rebuilding its financial capacity in 2024. We find the stock attractive, reiterating our BUY, and have raised our target price to SEK28.5 (25) on peer group multiples expansion.

Netel Group Holding (Buy, TP: SEK25.00) - 2024 focus on profit and cas...

Q1 gave further signs of good progress towards lowering volatility and raising performance across its operations. It is still a seasonally small (winter) quarter, but this year lacked last year’s troubles in Finland and Norway. We still see solid demand fundamentals and Netel further rebuilding its financial capacity in 2024. We have only tweaked our forecasts, and still find the stock attractive (2024–2026e FCF yield 14–23%). We reiterate our BUY and SEK25 target price.

Netel Group Holding (Buy, TP: SEK25.00) - Re-establishing its credenti...

Netel entered 2024 with a solid order backlog and re-established financial strength, after good progress in Q4, but we believe it still needs to lower volatility and raise performance across its operations. We continue to see solid demand fundamentals and Netel further rebuilding its financial capacity in 2024. We have only tweaked our forecasts, and still find the stock attractive (2024–2026e FCF yield of 21–27%) even after the recent strong performance. We reiterate our BUY and have raised our...

Netel Group Holding (Buy, TP: SEK20.00) - Deleveraging remains in focu...

Q3 matched headline expectations and a record order backlog supports the 2023 guidance. However, as we await an improved cash conversion, gearing remains high and with escalating financial costs, we have cut our 2023–2025e EPS by 13–30%. We still see sound medium-term demand fundamentals and believe Netel should be able to re-establish its quality credentials with investors. We reiterate our BUY, but have reduced our target price to SEK20 (29), with the deflated valuation offering an investment ...

Netel Group Holding (Buy, TP: SEK29.00) - Supportive guidance for 2023

After the weak and turbulent Q1, Netel is starting to re-establish its investment credentials, with an in-line Q2 report, record order backlog and supportive 2023 guidance, driving a c40% increase to our full-year EPS. We see still see sound medium-term demand fundamentals and believe Netel should be able to fully re-establish its quality credentials, with the current valuation implying significant potential upside. We reiterate our BUY and SEK29 target price.

Netel Group Holding (Buy, TP: SEK29.00) - Weak Q1

A weak Q1 saw what had been challenges in Finland and Norway snowball into losses, overshadowing solid progress elsewhere. 2023 now seems to be lining up to be a transition year financially, prompting us to make significant estimate cuts. We see still see sound medium-term demand fundamentals, but believe Netel needs to re-establish its quality credentials with investors. We have narrowed our valuation base to small-cap peers, and cut our target price to SEK29 (50); however, we still like the lo...

Netel Group Holding (Buy, TP: SEK50.00) - Looking ahead to 2023

Q4 showed good progress and Netel entered 2023 with a solid order backlog and good new contracting activity, but still a need to raise performance in Norway and Finland and release tied up working capital to rebuild its financial muscle. Demand fundamentals still seem solid, and we see Netel rebuilding its financial capacity in 2023, creating room for value-enhancing acquisitions, hopefully matching the strong deal fundamentals in 2022. We have only tweaked our forecasts, and reiterate our BUY a...

Northern Lights

Netel Group Holding (Buy, TP: SEK50.00) - Trend improvement in Q3

Netel showed good progress in Q3, returning to organic growth and with its recent acquisitions making strong contribution. Demand fundamentals still seem solid to us, and with its normal strong end-of-year FCF, we see Netel rebuilding its financial muscle, creating new opportunities for value-enhancing acquisitions, hopefully matching the strong deal fundamentals seen in 2022. We have only tweaked our forecasts, and we reiterate our BUY but have lowered our target price to SEK50 (61).

Northern Lights

Netel Group Holding (Buy, TP: SEK61.00) - UK fixed-network potential a...

Netel reported a mixed Q2 with still-strong revenue growth but with profit and cash flow burdened by project delays. It still sees strong demand fundamentals and its own financial targets within reach for 2022. Recent acquisitions appear to complement the organic outlook and seem value-enhancing (ROIC: 17–21%). We have cut our EPS by 2–3% for 2023–2024e on a slightly more cautious margin profile, and we reiterate our BUY, and have revised our target price to SEK61 (67).

Netel Group Holding (Buy, TP: SEK67.00) - Impressive growth continues

The Netel case is moving in a promising direction, with solid organic outlook now complemented by attractive industrial roll-up potential. The Q1 report showed impressive revenue growth (45% YOY) but seasonally weak profitability, given few project completions. Netel signalled a strong pipeline of acquisition targets, and in our view recent transactions look value-enhancing (ROIC 17–21%). We have tweaked our forecasts, and we reiterate our BUY and SEK67 target price.

Netel Group Holding (Buy, TP: SEK67.00) - Compounder valued on an orga...

The Netel case is developing in a promising direction, with the strong organic outlook now complemented by a promising industrial roll-up opportunity. The Q4 report shows that its asset-light business model supports high cash conversion of profit and drives FCF generation, with Netel signalling a strong pipeline of acquisition targets. We reiterate our BUY and SEK67 target price.