Jefferies sees above peer growth for Novozymes, ups to 'buy'

Novozymes A/S

29/01/2024 12:09

** Jefferies upgrades Novozymes  NZYMb.CO  to "buy" from
"hold" as it sees growth ahead of peers in 2024 for the
standalone company, as well as after its tie-up with Chr. Hansen
    ** Thanks to destocking, Protein investment and Bioenergy
tailwinds, Jefferies is 200 basis points ahead of consensus on
Novozymes' organic growth and about 4% on EBIT for this year
    ** It expects the new company's, Novonesis, organic growth
of 6.7% this year, in line with mid-term targets and EBIT
margins rising towards its 29% target by 2025 even with limited
synergy realisation
    ** "We believe combining the world's premier enzyme and
cultures/probiotics business will be powerful" - Jefferies
        ** It ups its PT 10.5% to DKK 420
  
    ** The brokerage sees organic sales growth 300 bps ahead of
peer averages for the new company in the year one
    ** While cyclical factors can subside if crush spread
decline, the broker expects structural factors will underpin
growth through to end of the decade 
    ** Out of 14 analysts that cover the stock, eight rate it
"strong buy" or "buy", five rate "hold", and one rates "sell"
   

 (Reporting by Marta Frąckowiak)
 ((marta.frackowiak@thomsonreuters.com))