SEB upgrades NNIT on 'game changing' divestment, strong growth outlook
09/08/2022 09:32
** SEB upgrades Danish information technology company NNIT
NNIT.CO to "buy" from "hold", citing a strong long-term
outlook thanks to the divestment of its legacy business in June
** SEB sees the sale of NNIT's declining, loss-making
infrastructure operations urn:newsml:reuters.com:*:nFWN2Y80R3 as "game changing", as it
turns the company into "a dedicated service and consulting
provider" and strengthens its profitability and cash flow
** The broker expects NNIT to grow 8-9% organically in
2023-24 with EBIT margins of 6.8% and 7.4%, respectively, mainly
driven by strong growth in its Life Science Solutions business
** SEB says that although a project delay and a cancellation
with a large customer in Q1 raised concerns among investors, the
broker sees this as a "short-term setback" while long-term
fundamentals remain unchanged
** The broker raises its target price to DKK 95 from DKK 70,
saying "the shares trade at a significant discount to peers,
which in our view can no longer be justified"
** NNIT shares rise as much as 3% in the morning trade
(Louise Breusch Rasmussen)
((Louisebreusch.rasmussen@thomsonreuters.com))