Nibe continues down on the stock exchange (Stockholm OMX) and the share costs around SEK 51 from previously over SEK 100 (on several occasions) e.g. when there was the pandemic, high electricity prices and war. A big drop and many people start to give up. Should you give up? Are there any glimmers of light ahead?
Browsed through old posts and old analysis, and Nibe’s goal is to have a turnover of 80 billion SEK by 2029 at the latest. In 2022, it was 40 billion SEK. The CEO is absolutely sure that it is completely possible and all the other goals they had were achieved even earlier.
Of the 40 billion SEK, the profit was a little over 10%, over 4 billion SEK. That is SEK 2.2 per share. If we say Nibe reaches the target in 2029 at the latest and makes 8 billion SEK in profit. That is SEK 4.4 per share. What is a reasonable valuation for Nibe over a longer period? PE 22 was historic with some exceptions, so we’ll take it. This gives a reasonable exchange rate in 2029 of SEK 96.8. In the worst case scenario. So if you buy shares today for SEK 50, in the worst case scenario you get 100% upside within 5 years. It’s really good!
The stock market as a whole returns 100% approximately every 7-8 years. Nibe is worth buying right now if you are thinking ahead. Everyone will talk again about the Paris Agreement, ESG trends, new heat pumps, the reconstruction of Ukraine, replacement of gas boilers and other old rubbish, support packages in Germany and the USA and much, much more. I see the PE number of about 11-13 in a few years at today’s rate. Definitely worth a purchase at these levels under SEK 50. I have bought more shares during the week. You must of course do your own DD.
Clearly a lot has changed throughout the year, so maybe everything moves two years ahead, but I still see Nibe reaching the goal in 2029. I buy when everyone is selling, I believe in the company and the demand that will be around for many years to come.
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