Norwegian is worth NOK 370 million – E24

Major bank HSBC is again cutting Norwegian’s exchange rate targets after the government earlier this week said no to increased support for the crisis.

The bank now believes the stock will fall to 10 øre, which is 82% below the level at which the stock traded on Wednesday afternoon.

Based on this, HSBC now values ​​the company at NOK 370 million. By comparison, the company was valued at more than NOK 14 billion by the market in May.

“Norwegian has often surprised us by finding fresh capital. We do not believe there is a new surprise on the way, ”HSBC writes in the recent review.

It is further claimed that they believe it is difficult to imagine a third party contributing fresh capital to the company, which is still burdened with debt and has two new competitors on the way.

Norwegian shares are down about one percent Thursday morning. The stock is trading at the time of writing for NOK 0.52.

SAS may be the winner

In a separate analysis, HSBC assumes that SAS will benefit from the problems Norwegian has ended up in. This is because the two companies compete for about 50 percent of the network, according to the main bank.

At the same time, SAS’s target price is set at NOK 1.75, which is 74% above the level at which the stock traded on Wednesday.

HSBC also notes that airlines will benefit from a vaccine, following the good news from Pfizer and BioNtech earlier this week.

“We don’t believe in a real recovery until the vaccine is widely available, but it doesn’t seem like it’s taking too long now. When the vaccine is on the market, we think demand may return faster than anticipated,” HSBC writes in the analysis. from SAS, according to the Direkt news agency.

SAS stock is up more than 17 percent to NOK 1,255 on the Oslo Stock Exchange at 10 o’clock.

I think the state said no to the new plans

HSBC spends a lot of time discussing the government’s decision not to open up to more support for Norwegian. According to E24 sources, the airline has borrowed between four and five billion crowns in loans from the state.

“We believe the decision was based on the Braathens family’s plans for a new Norwegian airline, as well as Wizz Air’s entry into Norway,” writes HSBC.

The main bank believes that the Norwegian authorities are motivated to ensure efficient travel within Norway.

“However, with two potential competitors that can compete with SAS, we see little motivation on the part of the authorities to fund highly leveraged Norwegian,” writes HSBC, noting that the debt comes primarily from expansion outside of Norway.

You think Braathens may be interested in the name

HSBC has noted that Norwegian in connection with the quarterly report earlier this week stated that it sees realistic alternatives for the company to continue its “operational existence”.

Here, the big bank comes up with alternative ways of how it can happen.

“We believe that the company’s branding may become relevant to Braathen’s new startup, which is currently known as Nyttflyselskap.no,” writes HSBC.

Furthermore, he believes that Norwegian’s departure times in Gatwick may be interesting for Wizz Air, EasyJet and potentially IAG, but that this will not bring liquidity to the company.