Nvidia’s results, Indian tariffs, French markets - what’s moving markets
On Wednesday, Berenberg initiated coverage on Royal Unibrew (CSE:RBREW:DC) (OTC: ROYUF) with a Hold rating and a price target of DKK597.10. The firm based its valuation on the company’s historical performance and recent market activities.
Royal Unibrew, known for its premium trading compared to peers, has seen a notable return on invested capital (ROIC) and return on equity (ROE) between 2016 and 2021, averaging 18% and 34% respectively. However, the company’s ROIC has recently approached the sector average due to significant investments in mergers and acquisitions and the rising costs due to inflation.
The analyst noted that Royal Unibrew’s past trading at an average enterprise value to earnings before interest, taxes, and amortization (EV/EBITA) multiple of 20 times is contingent on the recovery of its ROIC metrics to levels seen in the prior period. This recovery may be challenging in the near term due to planned investments in expanding capacity and additional acquisitions on the horizon.
To arrive at the price target, Berenberg applied a 15.0x target EV/EBITA multiple. This multiple reflects the firm’s expectations for Royal Unibrew’s financial performance and market position in the face of current economic pressures and strategic initiatives.
The coverage comes at a time when the company is navigating a complex market environment, balancing growth through acquisitions with the management of a higher cost base. The Hold rating suggests that Berenberg sees the current valuation as fair, given the circumstances.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.