Disappointing growth communication leaves few alternatives left

New targets hint potential share buybacks

Ahead of CMD on 20 Nov

ALK-Abello (Buy, TP: DKK190.00) - Solid momentum reaffirmed

We find ALK’s solid momentum reaffirmed with the strong Q3 results, where higher European tablet sales more than offset the softness in SCIT/SLIT-drops. We believe the results also confirmed continued profitability improvement, leaving ALK on track to meet its 2025 EBIT margin target of c25% and in a position of strength to invest in growth opportunities, with the Neffy deal as a good example. We reiterate our BUY and DKK190 target price.

CMB.TECH (Hold, TP: USD14.10) - Diversification at a cost

CMB.TECH’s diversified and ‘future-proof’ approach may prove attractive in steadily managing shipping cycles, changing fundamentals and stricter environmental regulations. However, diversification also comes at a price, and its heavy newbuild programme is straining its balance sheet and the outlook for dividends. Thus, we currently see greater upside potential in its pure crude tanker peers. We reiterate our HOLD and have lowered our target price to USD14.1 (16.3).

Benelux Morning Notes

Aalberts: Building already bottoming, industry tough. Air France-KLM: Nobody helps. Alfen: Covenant agreement, hikes output Smart Grid. AMG: Sweet for 2024F, sour for 2025F. ArcelorMittal: 3Q24 EBITDA beats by 6%, FCF solid. BAM: 3Q beats, on its way to reach FY guidance. CMB.TECH: 3Q and FY24 reasonable but then more challenges. D'Ieteren: EGM and dividend dates announced; Belron US peer Boyd disappointing 3Q24. GBL: Double-digit TSR expected over 2024-27F. KBC: 3Q better acro...

Morning Notes : AALB NA, ADYEN NA, CPINV BB, CMBT BB, GBLB BB, MDXH BB...

: AALB NA, ADYEN NA, CPINV BB, CMBT BB, GBLB BB, MDXH BB, TESB BB, ALFEN NA

Sinch (Buy, TP: SEK33.00) - Remains a BUY on valuation

Adjusted for a one-off, organic gross profit growth disappointed and the outlook for Q4 and the start of 2025 remains weak. We still see a strong underlying market and reiterate our BUY due to an attractive valuation. We have lowered our target price to SEK33 (37).

Surprisingly weak outlook in focus

Stock down on weak outlook

ALK-Abello (Buy, TP: DKK190.00) - Should be another strong quarter

We expect another solid quarter for ALK, driven by continued strong European tablet sales momentum (we estimate c25% organic growth YOY, versus c35% in Q2). In the event our European tablet estimates prove conservative, we believe the full-year guidance could be raised for the fourth time this year. We reiterate our BUY and DKK190 target price.

Twilio Q3 better-than-expected and raised guidance

Scorpio Tankers Minor model adjustments

We have updated our estimates following the Q3 report and Q4 guidance. We have lowered our 2024e adj. EBITDA by 4% and 2025–2026e by 2%. We still see attractive cash flow potential (~21% FCF yield on our 2025e) and find the current P/NAV of ~0.70x (stock down ~20% since early October) supportive for continued capital returns through share buybacks and an attractive risk/reward. We do not consider our estimate changes to be material, and we have not changed our BUY recommendation. We reiterate ou...

Goodwill write-down and prel. Q3 figures

Silicones better in Q3, Q4 likely a repeat

Continued to execute well in Q3

Q3 EBITDA 14% better

Scorpio Tankers (Buy, TP: USD93.00) - Robust cash-flow potential

Despite a seasonal slowdown, Q3 average product tanker rates were ~20% above the 5-year average, while near-term fundamentals seem intact, with 2024e tonne-mile growth set to outpace supply growth. Our 2025e fleet-wide TCE of USD28.5k/day implies still-strong cash-generation potential (~19% FCF yield) and is supportive of continued accretive buybacks through the company’s share repurchase programme. We reiterate our BUY but have cut our target price to USD93 (95).