On Thursday, Bernstein analyst Callum Elliott upgraded shares of Orkla ASA, a Norwegian conglomerate listed as ORK:NO and OTC: ORKLY, from 'Market Perform' to 'Outperform'. Accompanying the upgrade was a significant increase in the price target, from NOK 84.00 to NOK 114.00.
The upgrade reflects Bernstein's positive view on the company's recent transformation. Over the past year, Orkla has restructured into a more decentralized business model, which Bernstein believes will enhance operational agility and improve capital allocation decisions. According to the research firm, these changes position Orkla to be more responsive and efficient in its business operations.
Bernstein also noted improvements in Orkla's category growth exposure, which is seen as a driver for the company's long-term organic growth prospects. The analyst's forecast for Orkla's long-term organic growth has been revised upwards to approximately 3.6%, a notable increase from the previous forecast of 2.6%.
The new price target of NOK 114.00 is based on an enterprise value to EBITDA (EV/EBITDA) multiple of 8.5x. This is an adjustment from the prior multiple of 7.3x and is applied against Bernstein's increased forward next twelve months plus one (NTM+1) EBITDA estimate of NOK 11,602 for Orkla.
Elliott's commentary highlights the firm's approval of Orkla's strategic moves and improved growth outlook. The raised price target and rating upgrade signal Bernstein's confidence in Orkla's ability to deliver value to its shareholders going forward.
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