JPM sees less room for M&A, cuts estimates, TP for Storskogen

Storskogen AB (publ)

30/08/2022 10:29

** Ahead of Storskogen's  STORb.ST  inaugural Capital Market
Day (CMD) due on Sept. 27, JPMorgan lowers estimates for the
company and cuts target price for the stock by 15% to SEK 11 
    ** The brokerage retains an "underweight" recommendation on
Storskogen and flags the company's cash generation is running
"significantly" below target
    ** Combined with the current leverage level of 2.5x
interest-bearing net debt to adjusted RTM EBITDA, the Swedish
investment holding company is left with less room for M&A than
anticipated, it points out 
    ** JPM sees the upcoming CMD as an opportunity for
Storskogen's management to discuss whether its near-term focus
continue to be on M&A or pivot towards operational improvements,
and to explain its stance on indefinite holding period horizon
    ** "We see the rationale that, at some point, STORB may no
longer be the "best" owner of a specific business unit, and
categorically ruling out disposals may limit shareholder return
potential," the brokerage says
    ** JPM lowers estimates on Storskogen's 2022 revenue by 8%
and on EBITA by 5% 
    ** The stock is down 5% in morning trade and at the bottom
of the pan-European STOXX 600 index  .STOXX 
($1 = 10.6321 Swedish crowns)

 (Reporting by Jacob Rasmussen)
 ((jacob.rasmussen@thomsonreuters.com))