Neste's Q2 comparable EBITDA was slightly below our forecasts, but the lower-than-expected sales margin in Renewable Products in particular made the overall picture negative. The very weak market for Renewable Products has probably bottomed out, but the rate of market recovery and its timing are of course unclear.
The company’s growth slightly exceeded our estimates, whereas its operating result increased from the comparison period, but fell short of our expectations. Thus, the company’s development was a step in the right direction, but somewhat slower than we expected.
Overall, the company's Q2 report was fairly neutral compared to our expectations, although we have made moderate negative changes to our near-term forecasts.
Q2 was in line with expectations in terms of operations and commentary, and we left our forecasts broadly unchanged. In 2024, we expect the company’s earnings to be at the level of the comparison period, due to a challenging market, but to grow moderately in the coming years. Our forecasts are clearly below the company’s target levels. The share's valuation picture is still very attractive from several angles (2024e P/E: 14x, adj. P/E: 9x, DCF: EUR 29, SOTP: EUR 26 and expected return ~20%).
A takeover bid for Innofactor was announced yesterday, offering the owners a cash price of EUR 1.68 per share. In our view, the offer is a good one for shareholders from a number of perspectives and we recommend accepting the offer. A high bid and a strong commitment from the primary owner through the terms and conditions make a successful bid very likely and a competing bid very unlikely.
We reiterate our Reduce recommendation for Wärtsilä and raise our target price to EUR 17.00 (was EUR 16.50) after the good Q2 report, reflecting our positive forecast changes.
KONE released its Q2 report on Friday, which came in slightly below our forecasts for key operating metrics. The company updated the upper limits of the guidance range slightly downward. We have made negative revisions to our forecasts for the current year, but the revisions, which are limited to the second quarter, have reduced our full-year earnings forecasts by a modest 2%.
Q2 results were in line with our expectations, but the operational development was not as favorable. In Finland and Sweden, organic growth was negative in a weak market environment, but on the cost side the measures taken are having the expected effect. Progress in Spain has been good and Sweden is also on track. In the coming years, we will see if Talenom in Sweden can improve productivity and profitability, which will likely determine the direction of the stock.
Fiskars' Q2 result was close to expectations and the full-year guidance was reiterated. However, continued sluggish demand has driven down our forecasts for next year by as much as 10%. We believe the valuation is pricing in earnings growth for the next few years, which we think is premature.
Innofactor's Q2 results fell short of expectations as the challenging market also impacted the company's performance. New sales remain challenging, although the order book increased from the previous quarter.
We increase our fair value range ahead of Inderes’s Q2 report. Our take from recent months is that the company has continued to grow in AGM and IR software. However, due to high market penetration in Finland, the long-term value creation opportunity lies in Sweden, where the steps are still relatively small and the future is more uncertain. We raise our 2024-26 EBITDA estimates by 7-8%.
Haier, which has made a competing bid for Purmo, appears to be winning the tender and we expect the bid to be completed according to Haier's estimate, i.e. Q4'24-Q1'25.
Kreate's second quarter was promising in terms of both profitability and outlook. Profitability improved for the third consecutive quarter, while at the same time the market outlook for the different business areas has improved.
Enento's results were slightly ahead of our forecast, but this was driven by a lower-than-normal cost structure, which we expect to change in H2. The company provided anticipated revenue guidance, which, in line with our expectations, indicates a further decline in sales this year.
Nordea reported strong Q2 results in line with our expectations, with net interest income and fee and commission income developing as we had forecast. The bank's cost development during the quarter also did not provide any material surprises, and the company's profitability remains top-notch. In fact, we had to make only moderate changes to our estimates after the report.
In our opinion, the market situation for Sitowise did not develop favorably in the first half of the year, which is why we lowered our forecasts before the Q2 results. 2024 is still expected to be a very challenging year for the Buildings business, and there is now more uncertainty about the performance of other businesses.
The Chinese Haier made a competing bid for Purmo at a price of EUR 13.68 per share, i.e. over 20% higher than the previous offer of EUR 11.15. The consortium that submitted the previous offer has until the middle of next week to react to the new offer.