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Anora's Q1 result was below our expectations and the comparison period, even though net sales grew well. However, the company's guidance remained unchanged and price increases and cost savings should support the development from Q2 onwards. We lowered our estimates for this year but estimate changes for 2024-25 were minor. We still believe that Anora can achieve reasonably good earnings growth in the coming years, in addition to which the expected return is supported by dividends that grow with earnings.
Anora's share has fallen by more than 25% since the weak Q4 report. The business is fundamentally stable and defensive, and we expect steady earnings growth in the coming years. We feel the lower valuation already offers a sufficient expected return.
Anora’s Q4 report was weaker than expected in terms of earnings, guidance, dividend and the balance sheet. We cut our estimates significantly for 2023 (15% at EBIT level), but clearly less for later years, as we still expect profitability to improve in coming years. The valuation for 2023 (P/E 18x) is high and we still find the expected return modest.
Anora's Q3 results were close to expectations and the company reiterated its guidance. Our estimates are at the top end of the company’s guidance range. The company also announced new financial targets and strategy, which will be further discussed at next week's Capital Markets Day. We slightly raised our 2023 estimates - otherwise the revisions remained small. You can read more about our views on the company in our recent extensive report.
Anora is the Nordic market leader in wines and spirits. Organic growth is modest due to a stable market, and we expect earnings growth in the next few years to come mainly from acquisitions and synergies, as well as the leveling off of raw material costs. In the absence of longer-term earnings growth, Anora's expected return is mainly based on dividend yield of about 6%. The valuation at the current levels seems relatively correct, which is why we do not see the share as attractive.