reports
- David Vagman
- CFA
- Stijn Demeester
OCI N.V./More cash returns offset reinvestment risk/BUY
We adjust our target price for the recent US$3.3bn cash distribution and as we introduce a 15% discount due to reinvestment risk. We reiterate our BUY, as we believe the current implied discount of c.35% to OCI's fair value is too high, given its strong track record in value creation, capital allocation and return policy.
- ING Helpdesk
- ING Helpdesk
- ING Helpdesk
Benelux Morning Notes
ING Benelux Conference London: Aalberts, Arcadis, Azelis, Barco, Basic-Fit, Brunel International, DEME Group, Euronext, Fagron, Heijmans, Kinepolis, Lotus Bakeries, Melexis, Ontex, Randstad, Recticel, SBM Offshore, TKH Group, Van Lanschot Kempen Other company stories - OCI: Divestment of Methanol to Methanex for US$2.05bn, Staffing: US August temp volumes marginally better trend; NFP jobs miss
BFIT BASIC-FIT NV
SBMO SBM OFFSHORE NV
FAGR FAGRON SA
RAND RANDSTAD NV
LOTB LOTUS BAKERIES NV
REC RECTICEL SA
HEIJM HEIJMANS N.V. CERT
VLK
ARCAD VAN LANSCHOT KEMPEN NV CERT. OF SHS
AALB ARCADIS NV
OCI AALBERTS N.V.
BRNL OCI NV
ONTEX BRUNEL INTERNATIONAL N.V.
MELE ONTEX GROUP N.V.
TWEKA MELEXIS NV
KIN TKH GROUP N.V. CERT
BAR KINEPOLIS GROUP NV
AZE BARCO NV
DEME AZELIS GROUP NV
DEME GROUP NV
- ING Helpdesk
Benelux Morning Notes
Ackermans & van Haaren: Indian participation casts shadow over excellent result of core segments. ASML: Spotlight on export restrictions again. Basic-Fit: Dutch parliament persists in plans to raise VAT for oa Sports to 21%. CFE: Earnings quality improved in challenging markets. Eurocommercial Properties: Better numbers, guidance moved toward the higher end of the range. OCI: IFCO sale successfully closed, cash return unlocked Recticel: Solid 1H24 beat, FY guidance may disappoint. SIF Grou...
- David Vagman
- CFA
- Stijn Demeester
OCI N.V./Harvesting cash/BUY
We reiterate our BUY recommendation as we raise our target price to €35 per share from €31 and reaffirm OCI as an ING Benelux Favourite. With the full divestment of its Texas Blue Clean Ammonia project for €2.35bn to Woodside Energy, OCI is taking a further bold and unexpected step in unlocking value within its portfolio. This deal follows the divestment of its 50% stake in Fertiglobe to Adnoc and IFCo fertilizer asset to Koch for combined gross proceeds of US$7.2bn, with deal closing still expe...
- ING Helpdesk
- David Vagman
- CFA
- Stijn Demeester
OCI N.V./2Q24 preview: Improving operating rates/BUY
We update our forecasts ahead of OCI's 2Q24 results, which we expect to show improving operating rates in both Nitrogen and Methanol, albeit still impacted by a turnaround at Natgasoline. We reiterate our BUY, as we lower our target price to €31 per share, offering c.34% upside. OCI remains on the ING Benelux Favourites list, given (1) its appealing re-rating potential following two transformative divestments which will generate c.US$6.1bn in net cash proceeds, (2) upcoming cash distribution of ...
- ING Helpdesk
Benelux Morning Notes
ABN AMRO: 1Q24 Preview. ABN AMRO: Press reports on sale of French Life Neuflize JV with AXA. Agfa-Geveart: A miss on every line. ASR: Dutch residential rental income risk insignificant. B&S Group: Solid start to the year, costs under control. DEME Group: 1Q solidifies FY24 revenue outlook. GBL: Accelerating its share buybacks. Just Eat Takeaway.com: M&A appetite. OCI: Improving 1Q24 performance at RemainCo assets, strategic update due on 2Q24
- Frank Claassen
OCI - Cash returns are coming up
• The Q1-24 EBITDA was somewhat below our expectations, partly due to gas hedge losses. • The first EUR 4.50 p/s cash return is likely to come in the coming months and we expect two more returns to follow. Strategic review ongoing. • We stick to our Buy rating and TP of EUR 31 p/s, based on our SOTP.
- David Vagman
- CFA
- Stijn Demeester
OCI N.V./Model update ahead of 1Q24/BUY
We update our model, with our lower 2024F Adj. EBITDA estimate mostly explained by a refined view on phasing of holdco costs and gas hedging losses, as well as weather-related adverse volumes in 1Q24. We reiterate our BUY on OCI, an ING Benelux Favourite, on the back of appealing re-rating potential post-closing of the two recent transformative divestments, generating c.US$6.1bn in net cash proceeds, and optionality of the ongoing strategic review, which could lead to further crystallising of as...
- Marc Zwartsenburg
- CEFA
ING Benelux Favourites/Weekly performance and valuation update
In this publication we update the performance of our ING Benelux Favourites list as well as all valuation and ranking tables for our coverage universe. Performance on the front page is dated from the 26 April 2023, while historical performance is included on the second page. The methodology for our favourites selection is based on a bottom-up approach with a focus on absolute performance with clear near-term triggers. It is a rolling list, ie, stocks can enter/exit whenever we think opportune.
- ING Helpdesk
REVISED VERSION Benelux Morning Notes - to include ABN Amro results
ABN AMRO: 4Q results, new targets; SBB finally turning on the tap. Ahold Delhaize: Strong profitability in 4Q23 driven by US one-off adjustments . Euronext: 4Q23 Preview. Heineken: Four misses in a row with more to come. OCI: +US$3bn capital distribution, further ‘inbound interest' in assets. Vopak: FY23 nicely ended and FY24 looks OK. Results Calendar
- Frank Claassen
OCI - Returning half of its market cap
• The Q4-23 EBITDA was broadly in line with expectations. • Following closing of 2 multi-billion dollar deals, OCI will return more than USD 3bn in cash to shareholders (>EUR 13 p/s), which is roughly half its market cap. • We reiterate our Buy and raise our TP to EUR 31 p/s (was EUR 29 p/s), which is based on our SOTP with still a 5% discount (was 10%) to reflect risks on deals and re-investments.
- Marc Zwartsenburg
- CEFA
ING Benelux Favourites/Weekly performance and valuation update
In this publication we update the performance of our ING Benelux Favourites list as well as all valuation and ranking tables for our coverage universe. Performance on the front page is dated from the 26 April 2023, while historical performance is included on the second page. The methodology for our favourites selection is based on a bottom-up approach with a focus on absolute performance with clear near-term triggers. It is a rolling list, ie, stocks can enter/exit whenever we think opportune.
- Frank Claassen
OCI - Major deals mean major cash returns
Following two multi-billion dollar deals, we estimate OCI will move a to an estimated net cash position of >USD 4.5bn by end 2024E, which is already close to 80% if its current market cap. We estimate that the majority of this cash will be returned to shareholders in 2024, with the remainder re-invested in new clean fuels projects. We reiterate our Buy with a TP of EUR 29 p/s, based on our SOTP with a conservative 10% discount to reflect risks on deals and re-investments.
- David Vagman
- CFA
- Jason Kalamboussis
- Marc Hesselink
- CFA
- Marc Zwartsenburg
- CEFA
- Maxime Stranart
- Quirijn Mulder
- Stijn Demeester
- Thymen Rundberg
- Tijs Hollestelle
ING Benelux Favourites: ASM International, ASR, DEME Group, D'Ieteren,...
We refresh our ING Benelux Favourites list, adding Fugro and OCI and removing Azelis and Vopak. We still apply a fundamental bottom up approach in which we select stocks that provide the best (relative) upside within our Benelux coverage universe and these stocks need clear catalysts. Besides this, we screen the ING Benelux coverage in terms of earnings momentum, multiple contraction/expansion, and relative valuation vs historical averages in order to spot which companies have positive earnings ...
- David Vagman
- CFA
- Stijn Demeester
OCI N.V./Transformational deals not yet priced in/BUY
OCI has taken two major steps in its strategic review by divesting its 50% stake in Fertiglobe and US fertilizer asset IFCo, thereby crystallising net cash proceeds of +US$6.1bn or €27 per share. We believe the market has not yet priced in these two transformational deals, likely due to the weak LTM performance of RemainCo on the back of several adverse one-offs over the course 2023. With operational clouds clearing, a leaner structure geared towards the energy transition, and c.€20 per share of...
- Frank Claassen
OCI - Crystallizing cash
• Following the 2 multi-billion deals to sell both its stake in Fertiglobe and its Iowa fertilizer plant, we estimate that OCI will become net cash of close to USD 4bn in the course of 2024. • A significant part will be returned to shareholders, while leaving ample room to re-invest proceeds in clean fuels methanol and blue ammonia. • Our SOTP arrives at EUR 29 p/s, which still gives nice upside even after yesterday's share price jump, hence we reiterate our Buy rating.
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