DNB Markets believes the price is too high – E24

DNB Markets resumes coverage of the mortgage system company Tomra with a sell recommendation and believes the share price is simply too high.

The price target is set at NOK 320.

“Tomra is traded in the top 20 per cent of the 40 Nordic companies with the highest multiples, despite half of the turnover growth, less than half of the margins and scalability below the average,” it states.

The brokerage’s price target of NOK 320 per share corresponds to a P / E of 2023 estimates of 35 times, while Tomra trades at a P / E of 48 times.

The price multiple P / E stands for «price-earnings», and measures what the price of the share is in relation to the company’s annual profit after tax. PE is calculated as price per share / profit after tax distributed per share. For example, a company with a profit after tax of NOK 10 million, a share price of NOK 150 and one million shares outstanding will have a PE of 15.

The Tomra share is so far this year down around 30 percent. The fall has come after the stock has been one of the stock market winners for several years, partly due to the green stock market wave, with a jump of around 400 percent in the last five years.

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