Citi has updated its coverage on Royal Unibrew (RBREW: DC) (OTC: ROYUF), maintaining a Neutral rating but increasing the price target to DKK 560 from DKK 510.
The adjustment follows Royal Unibrew's recent financial performance update and management's raised guidance for the fiscal year 2024.
Royal Unibrew has experienced solid trading momentum in recent months, supported by favorable weather conditions in July and August.
As a result, the company's management has revised its revenue guidance for FY24 upwards to at least DKK 15 billion, an increase from the previous estimate of approximately DKK 15 billion.
Additionally, the lower end of the EBIT (earnings before interest and taxes) guidance range has been lifted to DKK 1,950 million from DKK 1,875 million, with the upper end remaining at DKK 2,250 million. This adjustment implies an organic EBIT growth between 14% and 19%.
Citi's forecasts align with these new estimates, predicting FY24 group revenues to reach DKK 15.03 billion and group EBIT to hit DKK 1,988 million.
The company also anticipates improved net finance expenses, now expecting less than DKK 300 million compared to the previous estimate of around DKK 350 million. In response, Citi has adjusted its forecast for FY24 finance expenses to DKK 295 million, a decrease from the earlier prediction of DKK 343 million.
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