In this equity research report, analysts Calle Alm-Ramberg and Nika Lundh take a closer look at Harboes Bryggeri, a Danish brewery holding 15% of the domestic beer market by volume. The Company is executing a shift towards the higher-margin non-alcoholic segment, while unlocking value through an overlooked trading segment. This is supported by recent facility upgrades, allowing Harboe to leverage excess capacity and realize cost synergies. Therefore, the EBIT margin is expected to rise from 4.2% in 2023/24A to 7.6% in 2026/27E. With an equally weighted DCF and relative valuation, using a target EV/EBIT 2027E multiple of 10x, a target price of DKK 236 is implied, corresponding to an upside of 59.4%.
Investment Thesis
● Structural shift towards higher-margin non-alcoholic beverages drives gross margin expansion
● Recently recognized trading segment scales efficiently and supports EBIT margin expansion
● Facility upgrades and cost synergies nearly double EBIT between 2023/24A and 2026/27E