Tomra (Sell, TP: NOK95.00) - Pricing does not reflect its growth

We expect Tomra to report a Q1 EBITA of NOK311m (results due at 7:00 CET on 26 April). We have reduced our 2024 EPS estimate by 3% on cuts in the Food segment while we have raised our 2026 by 6% from upwards revisions in the Recycling segment. We have raised our target price to NOK95 (75) while we reiterate our SELL as we struggle to justify its 2024e P/E of 33x (similar to that of the ‘Magnificent 7’ with ~20% annual growth rates) when seen in combination with Tomra’s 2024 revenues growth expec...

Tomra (Sell, TP: NOK75.00) - Good news was a reverse from Q3

After Tomra’s share price sold off by 23% on the Q3 results, it was up by 31% on the strong Q4 report. Post-Q3 consensus was negative revenue growth YOY for all segments. We expect consensus 2024–2025e EPS to come up c10%+, and have raised our 2024–2025e EPS by 4%, based on the guidance. We still find a P/E 2024e of 28x demanding when 2024e revenue growth is a modest 3% YOY, and we believe the longer-term growth prospects are also uncertain given DRS roll-out delays and uncertainties. We reitera...

Tomra (Sell, TP: NOK75.00) - The top line grows, but not EPS

We reiterate our view that Tomra’s price reflects too-lofty earnings growth expectations and highlight that earnings growth has been absent in recent years in spite of an expanding top line. Tomra’s EPS declined by ~6% in 2022 and we estimate a further decline in 2023 (particularly driven by a soft EBITA contribution in Food in 2023). We have reduced our 2024–2025e by ~2% on slightly lower order intake expectations from Recycling. We reiterate our SELL and NOK75 target price.

Tomra (Sell, TP: NOK75.00) - Another soft data point

The Q3 results were weak, with EBITA missing consensus by 26%. We reiterate our SELL and have cut our target price to NOK75 (100), as we have lowered our long-term growth assumption for deposit return scheme (DRS) sales from 9% to 6%. This comes after France said it would not implement DRS. Given France’s EU influence, we believe other EU states are less likely to implement DRS, reducing Tomra’s growth prospects.

Tomra (Sell, TP: NOK100.00) - Still waiting for DRS wave

We reiterate our SELL and have cut our target price to NOK100 (140), primarily on growth stocks’ multiples contraction due to higher interest rates. With a 2024e P/E of ~24x on our estimates, Tomra continues to look overvalued relative to its growth and margin attributes versus similarly high-multiple growth stocks. We have lowered our 2024–2025e EPS by ~10-4%, largely on estimate cuts for Food and Collection.

Tomra Systems ASA: 1 director

A director at Tomra Systems ASA bought 1,613 shares at 155.200NOK and the significance rating of the trade was 52/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years cle...

Tomra (Sell, TP: NOK140.00) - Revenue beat offset by higher costs

Q2 EBITA was NOK536m, 2% above our estimate and consensus, mainly driven by strong results in Food, which reported divisional EBITA of NOK121m, c28– 29% above our estimate and consensus. This was partly offset by higher ramp-up costs in Recycling. We have made minor estimate revisions on the report and still see the stock as overvalued at a 2024e P/E of ~31x. We reiterate our SELL and NOK140 target price.

Northern Lights

Tomra (Sell, TP: NOK140.00) - Multiples still appear too rich

We expect Q2 EBITA of NOK528m, 1% above consensus (results due at 07:00 CET on 14 July), reflecting continued high activity in both Collection and Recycling. We continue to believe Tomra’s valuation multiples imply too-high earnings growth expectations. We have made only minor estimate revisions ahead of the results and reiterate our SELL and NOK140 target price.

Tomra (Sell, TP: NOK140.00) - Solid top-line growth, soft margins

Q1 EBITA of NOK277m was 16% below our forecast and consensus, mainly driven by softer than expected results in Recycling and Food. We have made minor negative estimate revisions on the back of the report and maintain our view that Tomra lacks the attributes to justify trading at a 2024e P/E of ~31x. We thus reiterate our SELL and NOK140 target price.

Northern Lights

Tomra (Sell, TP: NOK140.00) - RVM competition picking up

We expect Q1 EBITA of NOK331m, in line with consensus. We forecast divisional EBITA of NOK257m in Collection, representing YOY growth of ~24%, reflecting high activity in new DRS markets, particularly Romania (scheduled to implement DRS in 2023). We have cut our 2023–2024e EPS by 2–3% on lower order intake assumptions in Recycling and continue to believe that the market ascribes overly rich trading multiples to Tomra. We reiterate our SELL and NOK140 target price.

Northern Lights

Tomra (Sell, TP: NOK140.00) - Margins continue to limp

Q4 EBITA of NOK496m was in line with our estimate, but beat consensus by 3%. However, we consider it a low-quality beat, driven by a stronger than expected Food result. Although Collection sales were 4% above our estimate and consensus, EBITA was 6% below our forecast and 1% below consensus. Cost inflation looks set to continue in Collection in 2023. Our 2023–2024e EPS are largely unchanged and we reiterate our SELL and NOK140 target price. We continue to believe the 2023e P/E of ~39x has decoup...

Northern Lights

Tomra (Sell, TP: NOK140.00) - Quiet before DRS storm

We expect Q4 EBITA of NOK498m, 3% above consensus (results due at 07:00 CET on 24 February), still reflecting cost issues in Collection (we estimate NOK262m divisional EBITA), but more normalised earnings in Recycling and Food. We forecast a 10% decline in EPS in 2022 YOY, given cost inflation headwinds, particularly in Collection. We have edged up our 2023–2024e EPS on higher growth in Collection but continue to believe Tomra’s multiples reflect too-lofty earnings expectations; we reiterate our...

Tomra - Challenged in Hungary

Tomra and EnvipCo chosen as Hungary RVM providers Approx. 50% market share for each New market: 2023 estimates up 9%, 2024 up 2%

Tomra (Sell, TP: NOK140.00) - Q3 reveals more weakness

We believe the soft Q3 results for the Food segment (EBITA 51% below consensus) revealed a less robust business model than assumed by the market. With the company having addressed cost inflation earlier in the year, we and consensus had forecast a gradual return to higher margins after re-pricing initiatives. We have reduced our 2023–2024e EPS by 5%, due to higher costs and lower revenues for Food, and in turn our target price to NOK140 (150). We regard the 2023e P/E of 36x as too rich and reite...

Tomra - Stars misaligned – down to SELL (Hold)

Q3: Sorting well below, not set to improve in Q4 Sorting growth cycle turning into 2023 Peak valuation relative to risk-free rate

Tomra - Q3 first take: Sorting hit

EBITA of NOK 454m, -11% vs cons Sorting order intake -6% vs cons Cons est down double-digit for ‘22e