Tomra shares jump after provisional EU packaging deal

Tomra Systems ASA

05/03/2024 10:25

** Shares in Norwegian recycling machinery maker Tomra
Systems  TOM.OL  jump around 12% with local analysts pointing to
the European Union's sustainable packaging deal
    ** The EU has reached a provisional deal on a new law to cut
packaging waste and ban single-use plastics, agreeing packaging
reduction targets of 5% by 2030 and 15% by 2040 and that all
packaging should be recyclable by 2030
    ** "To meet this objective, they (member states) must
establish deposit return systems (DRSs) for these types of
packaging," says Arctic Securities Analyst Jeppe Baardseth,
adding that if EU regulation gets implemented, Tomra's EPS may
hit about NOK 8 for 2025/26
    ** Still, Carnegie analyst Fabian Jorgensen says the
proposal suggests no significant changes to the Packaging and
Packaging Waste Reuglation (PPWR) legislation draft per Q4 2023,
and will not move estimates nor valuation
    ** "We acknowledge that sentiment from such legislative
progress improves sentiment, but are skeptical towards a
significant multiple expansion in Tomra, already trading at
P/E(24-26e) of 36-24x assuming a delay in UK until 2028," he
adds
    ** The stock tops pan-European STOXX 600  .STOXX  index

 (Reporting by Jesus Calero)
 ((Jesus.calero@thomsonreuters.com))