Nibe’s underlying results in the fourth quarter were “slightly better than expected,” according to a recent analysis by Handelsbanken analyst Gustaf Schwerin. However, it seems that it may not yet be a buying opportunity in the pressured stock. At least not according to the major bank, which maintains a hold recommendation for the next three months. Over a three-year period, the advice shifts to market perform.
“The worst is behind us”
Cost-saving measures continue to have an impact, and there are ongoing signs that the worst period in terms of volume development for heat pumps is now behind us, the analysis stated. However, the bank does not believe that the EU’s goal of 60 million installed heat pumps by 2024 will be met. Handelsbanken instead predicts 45 million installed heat pumps.
Gustaf Schwerin further believes that Nibe will show organic growth in the first quarter of this year. However, his forecast for the full-year results “is now slightly lower than the consensus forecast.”
“Despite the stock falling in connection with the report, the stock is still trading at EV/EBIT multiples of 23x and 19x (2025p and 2026p), which we believe is difficult to justify considering that one of the best industrial companies, Atlas Copco, can be purchased at lower multiples.”
In addition to these developments, Nibe has recently announced a significant reduction in dividends, prompting discussions about the company’s valuation.
Overall, while Nibe’s performance in the fourth quarter may have surpassed expectations, there are still uncertainties and challenges ahead. Investors and analysts will be closely monitoring the company’s progress and strategic decisions in the coming months to assess its long-term prospects and valuation in the market.
Stay tuned for more updates on Nibe and the evolving dynamics in the heat pump industry.