Analysts see an increase of more than 40%

Highlights in the case

Evry is well exposed to digitization and this affects the daily activities of all sectors. This argues in favor of Evry because companies are constantly looking for smarter and more economical solutions. A significant portion of recurring revenues is also strong. According to SB1M, 67% of revenues are recurring. In addition, less than five percent of customers terminate cooperation, which indicates a high degree of customer loyalty. In addition, the company holds a 33% market share in Norway, while the business generates a high direct return in the form of dividends and yields slightly above 6% per annum.

The merger with Tieto

The merger with Tieto offers a considerable advantage. According to the analysis of synergies prepared by SB1M, annual synergies of 75 million euros are expected, the implementation cost of which should rise to 130 million euros. Given the participation of Evry in TietoEVRY of 37.5% and a total return requirement of 8%, the synergies correspond to 6.4 NOK per share. As a result, the price target was added to NOK 5 after the synergy analysis was completed, rising from NOK 40 to the current target of NOK 45. The merger implies a larger and stronger market share in Sweden, a market on which EVRY has recently experienced difficulties. Synergies include cost synergies (opex) as well as revenue synergies.

Cost synergies are often easier to see but also easier to achieve than revenue synergies. In the TietoEVRY case, on the other hand, it is easy to see where companies can benefit from the expertise of others. The EVRY software platform in the banking and financial fields may be related to Tieto's clients within the sector.

Conclusion: Buy

At the time of writing, EVRY had grown by 1.42% to 32.2 NOK, a little over 8% since the beginning of the year.