COVID boost to go up in smoke, Barclays cuts

Scandinavian Tobacco A/S

10/11/2020 08:25

** Barclays cuts Danish cigars and pipe tobacco maker
Scandinavian Tobacco Group (STG)  STOGR.CO  to "equal-weight"
from "overweight" and lowers price target by 17% to DKK 105
    ** According to the brokerage the company should face very
difficult comps after it has benefited from
COVID-lockdown-related higher tobacco consumption
    ** "From its very high FY 2020 base, we expect little
organic revenue or EBITDA growth over next 3 years", adds
Barclays
    ** Moreover, it sees risks connected to implementing new
enterprise resource planning (ERP) in the beginning of 2021
    ** Thirdly, STG is more expensive on a relative basis within
tobacco, and the brokerage adds it prefers tobacco stocks with
easier comps, earnings momentum and growth

 ((joanna.wodzicka@tr.com))