Berenberg starts 'recession-proof' NKT with 'hold'

NKT A/S

18/06/2024 07:30

** Berenberg initiates cable solutions provider NKT  NKT.CO 
with "hold" and says the Danish company is "recession-proof" due
to revenue contribution from high-voltage cables, but lacks an
upside
    ** The brokerage sees NKT's revenue from high-voltage cables
doubling by 2028 and expects operational EBITDA margin to
gradually increase with execution of higher-margin projects in
the backlog
    ** "We estimate that NKT's current backlog offers visibility
until at least 2029 and the project-based nature of this
industry should insulate the company from economic downturns" - 
Berenberg
    ** However, NKT's lower portfolio diversification could
negatively affect the group, it says
    ** It adds that NKT's valuation is expensive compared to
peers Prysmian  PRY.MI  and Nexans  NEXS.PA  (both rated "buy");
starts the company with a PT of DKK 613, a 10% upside to
Monday's closing price
    ** Out of seven analysts that cover NKT, two rate the stock
"buy", three rate it "hold", and two "sell" or "strong sell"

 (Reporting by Greta Rosen Fondahn)
 ((Greta.RosenFondahn@thomsonreuters.com))