We re-initiate coverage of TOMRA with a Sell rating as we see further downside risk to already sliding consensus estimates. We highlight how historical growth has been largely driven by favourable FX and M&A, and expect 2020-2022 EBITA margins to fall short of the company’s >18% target. Our SOTP based target price of NOK 250 implies a 55% valuation premium to peers and historical multiples, despite lower growth and sliding profitability.
01 Sep 2020
IoC: Expectations, Sentiment… or Gravity?
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IoC: Expectations, Sentiment… or Gravity?
TOMRA Systems ASA (TMRA:FRA) | 0 0 0.0%
- Published:
01 Sep 2020 -
Author:
Carl Frederick Bjerke -
Pages:
71
We re-initiate coverage of TOMRA with a Sell rating as we see further downside risk to already sliding consensus estimates. We highlight how historical growth has been largely driven by favourable FX and M&A, and expect 2020-2022 EBITA margins to fall short of the company’s >18% target. Our SOTP based target price of NOK 250 implies a 55% valuation premium to peers and historical multiples, despite lower growth and sliding profitability.