Smartoptics (Buy, TP: NOK27.00) - We remain optimistic

Smartoptics’ Q1 results marked a slower start to the year than we forecast, primarily owing to weaker sales in Devices, which seems to be back to near-term tariff-induced uncertainty. On the flip side, we understand the slowdown seen towards end-Q1 has already caught up again in order inflow, and thus we remain upbeat for the quarters ahead. Following an estimate reduction, we have lowered our target price to NOK27 (30) but reiterate our BUY.

Pareto Bank (Buy, TP: NOK84.00) - Solid start to the year

Helped by still-solid core revenues and firm cost efficiency, PARB reported a Q1 ROE of 13.5%, despite some provisions. With deposit volumes rising by ~8.1% QOQ, the bank somewhat increased its bond holdings in the quarter, resulting in a ~5bp lower CET1 ratio at quarter-end, offset by strong earnings generation. We have made only minor changes to our 2026–2027e EPS. With the stock trading at a 2026e P/E of ~8.0x, we still find the valuation attractive, and reiterate our BUY and NOK84 target pri...

Arjo (Hold, TP: SEK35.00) - Soft start to 2025

Q1 sales were broadly in line, but adj. EBITDA was c8% below our forecast and c6% below consensus. The main differences came from higher operating expenses than expected as well as a slightly lower gross margin. Product sales were weak, but service/spare parts and rental saw stronger sales than expected, a mix that is generally negative for the margin trend. We reiterate our HOLD and have cut our target price to SEK35 (42).

Margin pressure in '25e

Sales ok, but higher opex in Q1

Smartoptics (Buy, TP: NOK30.00) - Expecting accelerated growth

Ahead of Smartoptics’ Q1 results, we continue to expect accelerating top-line momentum following a market recovery and market-share gains, with peers reporting the market is still on the right path. We have made minor estimate revisions due to updated incremental tariffs, headcount increases, and FX fluctuations: our 2025e EPS is 5% lower and 2026–2027e is 3–6% higher. We reiterate our BUY and NOK30 target price.

Important year coming up

Steady progress in Q1e

Mixed upside potential, despite market recovery expectations

Pent-up demand and falling interest rates remain the backbone for newbuild recovery expectations. However, as the recovery has not yet started, property developers screen as the most attractive long-term, but visibility remains mixed. Diversified construction companies are more attractive on near-term P/Es, although many seem to be fully valued on solid share-price performance over the past six months. We maintain a neutral sector view; NCC and Skanska are our top picks.

Pareto Bank (Buy, TP: NOK84.00) - Set for continued strong profitabili...

Supported by still-solid core revenues and firm cost efficiency, we expect a Q1 ROE of 13.0%, despite some provisions in real estate development. With an updated CET1 requirement of 16.29% (formerly 16.7%), including P2G, we see solid dividend potential and growth capacity. We have raised our 2026–2027e EPS by ~1%, and with the stock trading at a 2026e dividend-adjusted P/E of 8.2x, we continue to find the valuation attractive. Thus, we have raised our target price to NOK84 (76) and reiterate BU...

Arjo (Hold, TP: SEK42.00) - Stable Q1 expected

We are slightly below consensus for Q1, but believe this is due to different FX assumptions and our inclusion of higher one-off costs. We see stable sales and improving growth in 2025, with a new CEO not expected until H2. We reiterate our HOLD, but have trimmed our target price to SEK42 (43) following our forecast adjustments.

Smartoptics (Buy, TP: NOK30.00) - Top-line momentum accelerating

While our raised 2025–2026e opex offset our increased top-line estimates, we see the return to above-peers growth in Q4 as supportive of Smartoptics’ medium- to longer-term prospects and its ability to gain share in a rebounding market across regions. As such, while our earnings estimates are largely unchanged, we have increased our target price to NOK30 (21), as we expect the accelerating top-line momentum to lead to the market increasingly pricing in Smartoptics’ longer-term prospects. We reit...

Some early signs of improvement

NRC Group (Hold, TP: NOK4.50) - Results will speak for themselves

With its weaker-than-expected Q4, NRC Group reiterated its 2025 guidance for revenue of NOK7bn and an adj. EBIT margin above 2%. However, as the company has missed its revenue guidance and EBIT margin targets for seven years in a row (2018–2024), we await evidence of an EBIT margin recovery. We remain cautious, and believe NRC is a high-risk/high-reward investment case, with ample upside potential should it reach its EBIT margin targets. We reiterate our HOLD, but have cut our target price to NO...

Another messy report - ETM writedown of NOK 30m

Arjo (Hold, TP: SEK43.00) - Uneventful Q4 report

Q4 earnings had been pre-announced when Arjo informed the market of the change of CEO (mid-January); overall, sales and margins were stronger than had been expected pre-announcement. While there is still some investor uncertainty about certain European markets, management believes healthcare budget and demand issues should be resolved in 2025. We reiterate our HOLD, but have raised our 2025–2027e earnings, and in turn our target price to SEK43 (37).

Find comfort in the undramatic

Solid Q4 in line with pre-announcement

Q4e: Improving market outlook

Keeping it cautious in 2024