Q1 reporting continues

This week, Castellum and Balder reported Q1 results, Wihlborgs announced a new lease, and SBB corrected 2023 profits and dissolved Unobo. Norges Bank has signalled interest rates might stay higher for longer. K2A has halted preference dividend payments. The weighted-average implied EBITDA yields on the stocks we cover are 4.69% for 2024e and 4.97% for 2025e.

Q1 trends, estimates, valuation and top picks

The Q1 reports proved that sector companies could maintain record-high margins despite volume declines.

A good start to the year

Q1 EPS 7% above, but some special elements. Backlog implies revenue estimates are robust. Strong momentum, high expectations - HOLD.

Kongsberg Gruppen (Hold, TP: NOK780.00) - Solid Maritime margin beat i...

Q1 EBITDA beat our estimate and consensus by 9%, explained by a stronger Maritime (KM) margin than expected. However, as previously guided, the Defence (KD) margin did fall to 17% in this quarter. We have edged our 2025–2026e EPS up 2% after primarily raising our KM margin assumptions, but reiterate our HOLD and NOK780 target price as we believe the stock is already pricing in a possible ramp-up of NATO defence spending to at least 2.5% of GDP for all member states.

April web-activity insights

Web-activity data in April points to trading activity being down c7% MOM for Avanza and broadly flat for Nordnet. Based on this, we see upside to consensus Q2 brokerage income for both companies. The platforms are due to release their April statistics on 6 May.

Weekly Real Estate Matrix

Performance and valuation data for Nordic real estate stocks as of 26 April 2024.

Service-heavy Q1 boosts margin hopes

8% better orders, very low equipm. sales and strong margin. Many moving pieces, but adj. EBIT +2-5%. We consider valuation of recovered earnings too high. SELL

A lot to like now organic growth has turned

Q1e: earnings beat as Network Solutions returned to org. growth. We raise '24e-'26e adj. EBITDA-capex by 3-4% on 3-4% higher sales. Low valuation, fruitful cost savings and easy comps: up to BUY (Hold).

Wärtsilä (Buy, TP: EUR20.00) - Smooth sailing

Following strong Q1 orders and earnings, we have raised our 2024–2026e clean EPS by 4% on average and our target price to EUR20 (18). We reiterate our BUY. We continue to forecast multiyear sales and earnings growth for Wärtsilä, and view it as attractively valued (see our recent report ‘Refuelled engines’).

Q1 reporting season kicks off

Q1 reporting season kicked off this week, with results from Nyfosa, Entra, Wallenstam, Fabege, KMC Properties, Pandox, and Catena. In other news, Public Property Invest is to be listed on the Oslo stock exchange on 29 April. The weighted-average implied EBITDA yields on the stocks we cover are 4.75% for 2024e and 5.04% for 2025e.

Sandvik AB: 1 director

A director at Sandvik AB bought 500,000 shares at 228.239SEK and the significance rating of the trade was 67/100. 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 ...

AAK (Buy, TP: SEK295.00) - 2024 likely to be a record year

Q1 was solid, with adj. EBIT 17% above consensus, driven by still-strong EBIT/kg and a return to organic volume growth. With high cocoa prices set for the near future and AAK’s solid position in helping customers shift into non-cocoa solutions (along with an ongoing factory optimisation programme), we still like AAK’s earnings momentum. We reiterate our BUY and have raised our target price to SEK295 (270) on higher estimates.

Good orders, low equipment sales drive margin mix

Pareto Bank (Buy, TP: NOK68.00) - Loan-loss downtick

Helped by further NII expansion and a loan-loss downtick, Pareto Bank reported a solid Q1 ROE of 14.3%. While the CET1 ratio fell QOQ after strong lending growth (2.2% QOQ), the bank has a still-solid ~1.4%-point headroom to its 16.7% target. With the stock trading at a 2025e P/E of ~6.7x, we continue to find the valuation attractive. We reiterate our BUY and have raised our target price to NOK68 (63).

AAK (Buy, TP: SEK270.00) - Yet another strong quarter

We consider this a positive report for AAK, including adjusted EBIT 17% above consensus, strong cash flow, EBIT/kg above SEK2 once again and an EBIT margin above 10%. We expect consensus 2024e adj. EBIT to come up c5–10% on the results and believe a positive share price reaction is warranted.

Tough comps, but solid underlying progress

Borregaard (Buy, TP: NOK200.00) - Q1 met expectations

The Q1 results were in line with expectations. While the BioSolutions segment beat our forecast due to higher volumes and prices, the Fine Chemicals segment saw lower deliveries than expected. We expect some of these volumes to revert and boost the Q2 result in Fine Chemicals. The BioMaterials segment was somewhat below our forecast, after a majority of the price negotiations for 2024 have been finalised. Demand appears to be rather strong for specialty cellulose and we thus see upside potential...

NOK winner, and a Q1 beat

Q1 EBITDA +3% above, higher volumes in '24. Potential for higher prices in '24: GP cut and pulp prices up. NOK winner: MTM EPS of NOK +12, long-term NOK +14.

Rich in growth, quality and valuation

Still growing well into Q1e. Strong tailwinds in Defence, but within expectations. Strong growth into the end of the decade priced in - HOLD.