Barclays starts with "overweight"

Scandinavian Tobacco A/S

23/07/2020 09:47

July 23 -    ** Barclays initiates Danish cigars and pipe
tobacco maker Scandinavian Tobacco Group (STG)  STOGR.CO  with
an "overweight" rating, highlighting its full-year EBITDA
forecast is 9% ahead of company consensus 
    ** The brokerage expects STG's e-commerce platforms, Cigars
International and Thompson Cigars, which contribute about 25% of
the company's EBITDA, to have benefited from COVID-related
shutdowns
    ** Also, in its view, consensus is not accurately modelling
STG's recent acquisition of Agio cigars  urn:newsml:reuters.com:*:nFWN2CB0BF
    ** The brokerage points out the tobacco group is relying on
M&A to offset declines in its core business, adding that "STG
seems to have paid a about 5x EBITDA multiple (after targeted
synergies), which is quite attractive"
    ** Barclays sees U.S. regulatory outlook as a headwind for
U.S. exposed tobacco stocks, noting this being the case more for
Swedish Match  SWMA.ST  and Altria Group  MO.N  urn:newsml:reuters.com:*:nL8N2EF11G than
STG

 ((aleksandra.jasiurska@thomsonreuters.com))