Better than expected and improvement y-o-y

Golden Ocean (Sell, TP: NOK140.00) - Likely topping out for now

We find the recent freight market strength and even stronger share price performance exaggerated given our dry bulk sector outlook. Chinese import demand is in question from the record-high run-rate due to flailing fundamental demand. Elevated asset values versus our rate expectations leave a fragile situation for valuations and we believe the risks outweigh the upside potential medium-term. Hence, we have downgraded to SELL (HOLD) and have cut our target price to NOK140 (142).

A. P. Møller Mærsk (Sell, TP: DKK9000.00) - Challenging the deep value...

The Q1 results proved disappointing to buy-side expectations, though reasonably aligned and even bullish compared to near-term consensus. Their market commentary could raise expectations above the upper end of the potentially conservative guidance, but we struggle to see the intrinsic value when facing the bleak container markets for 2025–2026e. We reiterate our SELL and have cut our target price to DKK9,000 (9,600).

Continued strong demand will make a difference

Surprisingly strong container demand makes a big difference. '24e EBITDA of USD 6.2bn. TP of DKK 12,800 (13,260) – BUY.

Better guidance, but within expectations

Q1'24 EBITDA of USD 1,590m (ABGSCe at USD 1,941, cons. at USD 1,604m). Segments - miss for Ocean and Logistics & Services, beat in Terminals and Towage. Lower end of guidance lifted, share slightly up today.

Yard response and dry bulk qualms

Our trip to South Korea and China revealed Chinese shipbuilders are seeking growth to take on Korea’s established yards who are facing constraints. An eagerness to add capacity is one of our takeaways, as well as a gloomy outlook for Chinese real estate, which in our view should inevitably weigh on dry bulk demand.

Too cheap with near-term earnings upside

Underlying demand much better than expected. Guidance upgrade likely - ABGSCe '24 EBITDA +20% vs. cons.. TP of DKK 13,260 (10,700) – BUY (Hold).

A. P. Møller Mærsk (Sell, TP: DKK9600.00) - Loose ends into Q1 results

There is a substantial discrepancy between container liners’ reported and guided revenue for Q1, as the impacts of the Red Sea disruption and resurgent freight rates are revealed. Near-term consensus could be too low, but the 2025–2026 outlook is set to be much worse than the market believes. We reiterate our SELL, but have raised our target price to DKK9,600 (9,500).

Medistim (Hold, TP: NOK190.00) - Sales in Americas weaken

Revenues grew 3.5% YOY in Q1 (currency-neutral total sales grew 2.2%), below our estimate c6%. The EBIT margin of 24% was almost back to normal and in our view shows the low margin in Q4 2023 (16.4%) should be seen as a one-off. However, we remain concerned about revenue growth, especially in the Americas, after the fifth consecutive quarter of declining currency-neutral sales. Thus, while we reiterate our HOLD, we have lowered our 2024–2026e sales by c3–8% and cut our target price to NOK190 (21...

Renovation rules now a reality

The Energy Performance of Buildings Directive (EPBD) was approved on 12 April, requiring the modernisation of existing real estate in the EU, and will soon enter the Official Journal of the EU. Member states will have two years to incorporate the provisions into their national legislation. While Q1 is Nordic construction’s low season due to winter effects, we see some downside risk to Q1e consensus and longer-term to 2024–2026e EBIT on lower development gains. We recommend a stock-picking approa...

Veidekke (Hold, TP: NOK120.00) - Low season ahead

Due to Nordic winter effects, Q1 typically marks low season for Veidekke. We are below consensus on Q1e EBIT, forecasting a low-season nominal loss. We expect reduced long-term civil engineering spending in Norway following publication of the new National Transport Plan (NTP), but with a weaker NOK, our 2024–2026e EPS are broadly unchanged. We have raised our target price to NOK120 (115) to reflect higher peer multiples, but reiterate our HOLD.

A brewing challenge for the yards

Our 17th Annual Energy & Shipping Conference was well attended by investors and industry executives showcasing the still-growing interest for the sectors. Limited yard capacity is fuelling high newbuilding prices and raising freight rate expectations for the vast fleet renewal necessary in the coming decade. Long lead times underpin a bullish supply story for much of shipping in the coming years, albeit exposed to geopolitical risks affecting trade patterns. Our overall impression was general op...

Vestas Wind Systems A/S: Update following rating affirmation

Our credit view of this issuer reflects its solid liquidity profile and a conservative financial policy, constrained by its input cost inflation.

Medistim (Hold, TP: NOK210.00) - Decreased EBIT margin

Revenues were down in all regions in Q4, with currency-neutral total sales down c13.7% YOY. Due to various strategic initiatives, the EBIT margin was unusually low in the quarter, but we expect it to gradually come back to ‘normal’ levels of 25–30%. However, we have lowered our sales estimates, downgraded to HOLD and lowered our target price to NOK210 (260).

Golden Ocean (Hold, TP: NOK142.00) - Bull-case scenario materialising

We see our dry bulk bull-case scenario materialising for the time being, but highlight elevated NAVs and tight valuations, decoupled values and earnings, as well as decoupled Chinese demand fundamentals and physical markets. We reiterate HOLD, but have raised our target price to NOK142 (121).