reports
- Helene Kvilhaug Brøndbo
Ørsted (Hold, TP: DKK405.00) - A neutral Q1 report
Investors were relieved after Ørsted’s decent Q1 results, despite the cash flow being a tad weak, with a ‘no news is good news’ attitude. As the stock is trading largely in line with our valuation of the company’s underlying assets, we consider this fair. We believe further signs of higher project profitability are needed for the stock to move higher, and thus consider the comments about a better farm-down market in interest and pricing to be supportive. In all, we consider the report neutral an...
Europris ASA: 1 director
A director at Europris ASA bought 7,232 shares at 68.704NOK and the significance rating of the trade was 69/100. 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 clearly s...
- Ole Martin Westgaard
Europris (Buy, TP: NOK80.00) - Not its best report
Both the Q1 results and the 2024 cost guidance disappointed. However, we reiterate our BUY as we continue to find the valuation attractive and believe Europris has a winning concept in the current market, but have lowered our target price to NOK80 (85), reflecting our estimate cuts.
- ABGSC Retail Research
- Ali Shemmari
- Petter Nystrøm
- Ole Martin Westgaard
Europris (Buy, TP: NOK85.00) - Weak report and guidance
We consider this a weak report, below expectations due to lower gross margins and higher costs, and a cost guidance above expectations. We expect consensus 2024e EBITDA to come down 7.5–10% and believe a c5–10% negative share price reaction is warranted.
- Helene Kvilhaug Brøndbo
Ørsted (Hold, TP: DKK405.00) - Anticipation for 2024 tender activity
With record-high 2024 tender activity (up to 40GW of offshore wind capacity set to be awarded by year-end), the supply/demand balance for new capacity is starting to look more promising. With limited growth priced into Ørsted’s share price, we believe any awards at accretive offtake prices could spark capital markets’ belief in renewed profitable growth and spark investor interest. On the other hand, we expect some of the tenders to remain competitive, and the high auctioned capacity could put f...
- Ole Martin Westgaard
Europris (Buy, TP: NOK85.00) - Entering Sweden at unique price
Europris announced yesterday after the close that it has signed an agreement to acquire the remaining 80% of Runsvengruppen. While Europris announced in January that it would exercise the option, we find it positive that the two parties have come to a final agreement, enabling Europris to enter Sweden at what we believe is a highly attractive multiple.
- Ole Martin Westgaard
Europris (Buy, TP: NOK85.00) - Waiting for gross margin recovery
We are in line with consensus for Q1, as we expect a slight gross margin recovery YOY to be offset by higher opex-to-sales. We reiterate our BUY and NOK85 target price as we still find the valuation attractive and believe Europris should continue to outperform versus the market in a tough retail environment.
- Helene Kvilhaug Brøndbo
Ørsted (Hold, TP: DKK375.00) - Good, but not enough
In line with our expectations, Ørsted’s strategic plans featured lower growth, more extensive farm-downs, a dividend halt for 2023–2025, and no new equity. While this should leave the company better capitalised, it was not enough to avoid a credit rating downgrade by S&P from BBB+ to BBB. As the company still has an investment grade rating and more robust growth plans than before, we do not expect a material negative effect. However, we believe it could result in slightly higher financing costs ...
- Ole Martin Westgaard
Europris (Buy, TP: NOK85.00) - Look past Q4 results to ÖoB deal
We reiterate our BUY and have raised our target price to NOK85 (80), as we believe the long-term valuation upside potential from the ÖoB acquisition offsets the estimate cuts stemming from a disappointing Q4. At our target price, Europris would be trading at a 2025e P/E of 13x excluding the contribution from the ÖoB acquisition.
- Ole Martin Westgaard
Europris (Buy, TP: NOK80.00) - Europris to exercise ÖoB option
Europris announced this evening that it will exercise its option to acquire the remaining 80% of Runsvengruppen. While not surprising, we believe the decision is a clear positive, bringing Europris closer to entering Sweden at what we believe is a highly attractive multiple.
- Helene Kvilhaug Brøndbo
Ørsted (Hold, TP: DKK375.00) - Catalysts look priced in
We believe Ørsted’s strategic plan will be the key focus in conjunction with its annual report, and retain our view of the company not needing to raise equity to maintain its BBB+ credit rating. With lower interest rates and more clarity on its balance sheet and growth plans after the strategic update, we expect to see greater investor willingness to price in a moderate contribution from growth again. With this, a lower WACC and a higher contribution from Hornsea 3, we have raised our target pri...
- Ole Martin Westgaard
Europris (Buy, TP: NOK80.00) - Closing in on Swedish expansion
Europris announced that it won the arbitration case with RuNor considering its option to acquire the remaining 80% of Runsvengruppen and that the 2019 EBITDA as adjusted down SEK18.4m. We believe the announcement is a clear positive, bringing Europris one step closer to entering Sweden at a highly attractive multiple at a price cNOK200m below the previous guidance.
- Helene Kvilhaug Brøndbo
Supportive changes to Norwegian wind energy resource tax
Last night, the Norwegian Parliament agreed on an effective resource tax on wind energy of 25% versus the 35% previously proposed. At first glance, it seems the scheme will now be investment-neutral for new wind farms, which was a key pushback from the industry to the previous proposal. Among the renewable energy producers under our coverage, the new resource tax scheme will benefit Cloudberry and Bonheur. While some details are still unclear, we estimate it will increase the value of Cloudberry...
- Ole Martin Westgaard
Europris (Buy, TP: NOK80.00) - Well positioned in tough market
We are 3% above consensus on Q4e EBITDA, as we expect continued LFL growth and a slightly improved gross margin YOY. We reiterate our BUY recommendation and keep our target price unchanged, despite slight positive estimate revisions, as we continue to find the valuation attractive and believe Europris is well positioned for the current retail environment.
- Ole Martin Westgaard
Europris (Buy, TP: NOK80.00) - Q3 slightly above consensus
We consider this a slightly positive report for Europris, including results above consensus driven by a better gross margin and no change to the outlook. We expect a 1% positive revision to consensus 2023e EBITDA and believe a positive share price reaction is warranted.
- Helene Kvilhaug Brøndbo
Ørsted (Buy, TP: DKK325.00) - Darker before the dawn
Ørsted has started addressing investor concerns over capital allocation and weak profitability, walking away from the unprofitable Ocean Wind 1 and 2 projects, and acknowledging its challenged capital structure. We see a risk of challenged liquidity based on its capex plans, and believe a significant cut in growth targets would be necessary for the company to avoid raising equity. That said, the stock is trading 22% below our calculation of its underlying asset value, reflected by our DKK325 (36...
- Helene Kvilhaug Brøndbo
Ørsted (Hold, TP: DKK360.00) - Growth target revision likely
With no recent project awards and several awarded projects at risk, we believe Ørsted will need to lower its 50GW growth target. With limited growth priced in, we believe a message of capital discipline would be received well by the capital markets, although we see the potential for some negative consensus revisions. We reiterate our HOLD, but have cut our target price to DKK360 (430), as we no longer include growth beyond awarded projects given the challenging market environment and weak prospe...
- Ole Martin Westgaard
Europris (Buy, TP: NOK80.00) - Eyeing Q3 gross margin recovery
We are positive ahead of the Q3 results, expecting a beat versus consensus driven by a continued positive LFL trend and slightly higher gross margins QOQ. We still find the valuation attractive and believe Europris has a strong offering in the current retail environment. We reiterate our BUY but have lowered our target price to NOK80 (83) on slight estimate cuts.
- Helene Kvilhaug Brøndbo
Ørsted (Hold, TP: DKK430.00) - Moody’s outlook cut to ‘negative’
Moody’s change in Ørsted’s credit outlook to ‘negative’ from ‘stable’ after the warned impairments of up to DKK16bn last week has added fuel to investor concerns related to the company’s willingness to invest in projects with low profitability and liquidity. Credit curves suggest that a potential downgrade could raise the company’s credit margin by ~25bp, increasing its WACC by ~10bp. This, in turn, would slightly lower our DCF-based valuation of Ørsted’s existing business and visible growth of ...
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