Quantafuel Call Today, Norske Skog Updates

Over 150 analysts and investors participated in the call. The CEO made a short introduction remarks in which he repeated what was said in the press release. There was a burner failure, they are investigating it and will know more this week. After that he went to Q and A. That did not bring any material additional information that was not press released.

I struggle to understand the new management PR strategy. First they were setting up for themselves very ambitions targets which they were not able to meet. That disappointed the market. That was unnecessary. Now they seem to be starting a policy of total openness. They already announced another call for later on this week.

QFUEL is in commissioning phase. These issues are normal. It happens. It is just a delay. The only question if it is one week or one month. None of that is big deal. If they are going to announce and discuss with shareholders any technological failure, that will just lead to share price volatility. I think it is a wrong strategy. The market does not need to know every detail. If you start providing all those details the investor confidence will not increase. It will only increase volatility of the share price.

The management did try to emphasize, that the company is making progress, their view on the technology remains unchanged and reconfirmed this year guidance again. Lars said they have sent 6 shipments to BASF in January – as many as in the the whole last year. Evidence of the progress Quantafuel is making.

Norske Skog Price Targets updates

I wrote here about five times on NSKOG this year. The share price gain is 35% YTD. It still trades at 2.8x EV/EBITDA’22E (peers at ~7-8x). Brokers published their increased price targets today.

Pareto increased their price target to 90NOK from 70NOK. The 90NOK price target is equal fot ~5x EV/EBITDA’22E.

ABG increased their price target to 70NOK from 50NOK. The wrote “our SOTP could end up closer to NOK 100/sh.”

DNB increased their price target to 80 NOK from 55NOK. The research is called “Impressive pricing power” They wrote: “As we are increasingly confident in our 2022–2023e scenario and believe management will execute on the packaging transition that could lead to EBITDA of more than NOK2bn by 2026e, we like the risk/reward. Our target price corresponds to an EV/EBITDA for 2022e of 5.6x and for 2023e of 6.3x.”

I will write more details on the research in the next days. Other brokers are due to report their increased price targets. Please see my Friday posts for details on the investment story.

The company is starting to be more communicative with shareholders. They just announced a call for the 1st March for ABG clients. Hope they will announce commissioning progress of the Waste to Energy plant.

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The goal of the blog is to provide investment ideas for further research. I/we have a beneficial position in the shares discussed above either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article. The article does not represent investment advice. Please do your own research before making any investment action.

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