Ferronordic: In it for the long haul - Nordea

We expect a solid Q4 report for Ferronordic on 18 February, with sales up 37% y/y and adjusted EBIT up 84%, owing to a stronger margin y/y. Recent geopolitical turmoil surrounding Russia (~80% of sales) has hurt the share, but Ferronordic has proven its resilience through tough times before. On our forecasts, which do not include further M&A, large contract wins or any potential sanctions, Ferronordic is valued at an implicit ~17% WACC, trading at 2023E EV/EBIT of 5x. We cut our multiples-based fair value to SEK 254-356 (288-381), implying a 2023E EV/EBIT of 4.5x-6.5x. Marketing material commissioned by Ferronordic.

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