Q1 EBITA beat our estimate and consensus on lower costs than expected as a result of scale benefits, while net revenue was a little soft, largely explained by the billing rate (NOK/day) rising only 2.1% YOY (missing our estimate by 3%) due to changes in the geographical mix. Reflecting the earnings outperformance and tight cost control, we have raised our 2024e EPS by c8%, 2025e by c4% and 2026e by c2%, and in turn our target price to NOK34 (31.5); we reiterate our BUY.
With Easter in Q1, the billable working days in the quarter were 60 versus 65 last year. Thus, we expect a YOY drop in adj. EBIT of c55%. Our Q1 focus point is the billing ratio, with new hires in Sweden ramping up and Building demand in regional Norway levelling out as the main moving parts. For 2026, consensus EBIT seems too bullish, given few 2026e working days. However, the long-term story remains intact in our view, despite this potential consensus downside. We reiterate our BUY and NOK31.5...
Q4 EBITA was above company-collected consensus and in line with our forecast on solid cost control, despite a weaker-than-expected billing rate. Management proposed a DPS of NOK1.2, above our forecast and consensus. We have marginally updated our 2024–2026e revenues on higher FTEs and an increased billing rate. We continue to find the valuation attractive, especially in light of Norconsult’s long and profitable growth track record. We reiterate our BUY and have raised our target price to NOK31.5...
We expect Norconsult’s Q4 headline results to be hurt by one-offs from the IPO during the quarter. However, the underlying results are likely to be strong, and we forecast net revenues up c15% YOY. We believe the 2024–2025e adj. EV/EBIT valuation remains one of the most attractive in the sector, and we reiterate our BUY and NOK30 target price.
With two decades of profitable growth and among the highest (and most stable) EBITA margins within its sector, we see potential for Norconsult to trade at a premium to its peer-group average long-term. With its light balance sheet and healthy cash, as well as solid demand for its technical services given increasing complexity of projects and tightened ESG regulations, we initiate coverage with a BUY and NOK30 price target.
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