Last Update 23 Mar 26

BRG: Dividend Support And Stable Earnings Profile Will Drive Future Upside

Analysts kept the fair value estimate for Borregaard steady at NOK 200, with only very small tweaks to inputs like the discount rate, revenue growth, profit margin, and future P/E, reflecting recent price target cuts and more cautious views in Street research.

Analyst Commentary

Bullish Takeaways

Bullish analysts view the unchanged NOK 200 fair value estimate as a sign that the long term earnings and cash flow assumptions remain intact despite recent target cuts.
The modest adjustments to inputs such as discount rate, revenue growth, profit margin, and future P/E suggest that analysts still see the core investment case as broadly stable rather than needing a full reset.
Some bullish analysts point to the gap between the steady fair value and lower price targets as potential upside if execution tracks existing forecasts.
The decision to maintain the overall valuation framework indicates that analysts continue to see the business as capable of supporting current return assumptions over time, subject to delivery on operational goals.

Bearish Takeaways

Bearish analysts have acted more cautiously on the stock, reflected in lower price targets and a generally more conservative stance on near term expectations.
The tweaks to discount rate and future P/E point to increased focus on risk, with greater scrutiny on how sensitive the valuation is to any shortfall in execution or growth.
More cautious views in recent research highlight concerns that delivering on revenue growth and margin assumptions may be harder, which could limit the scope for multiple expansion.
Market reaction to the price target reductions signals that some investors are giving more weight to execution risk than to the unchanged fair value, keeping sentiment restrained for now.

What's in the News

The Board of Directors held a meeting on 3 February 2026 to consider proposing an ordinary dividend for 2025 of NOK 4.75 per share to the Annual General Meeting (Key Developments).
At the same meeting, the Board decided to propose this ordinary dividend, with the total dividend payment estimated at NOK 474 million, subject to the final number of treasury shares (Key Developments).
No dividend is planned on treasury shares held by the Borregaard Group. The final payout will therefore depend on the number of such shares at the time of the Annual General Meeting (Key Developments).
Shares acquired up to and including 16 April 2026 are set to carry the right to receive the proposed dividend. Shares acquired on or after 17 April 2026 are not set to carry dividend rights, and the share is expected to trade ex dividend on 17 April 2026 (Key Developments).
The Annual General Meeting is scheduled for 16 April 2026 at 1 p.m. (13:00 CEST) in Sarpsborg as a digital meeting. The proposed dividend is planned for payment on 27 April 2026 to shareholders registered as of 20 April 2026, subject to AGM approval (Key Developments).

Valuation Changes

Fair Value: NOK 200.0 per share, unchanged from the previous NOK 200, indicating a stable central valuation point.
Discount Rate: edged slightly lower from 7.03% to 7.01%, a very small adjustment to the required return assumption.
Revenue Growth: kept effectively unchanged at about 5.48%, with only a minimal numerical refinement.
Net Profit Margin: remains stable at roughly 13.67%, with only a very small technical adjustment.
Future P/E: adjusted marginally from 19.62x to 19.61x, indicating a nearly identical valuation multiple assumption.

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Key Takeaways

Strong demand for green products and high-value specialties is expected to boost sales and margins, driving revenue growth for Borregaard.
Operational improvements and currency hedging could stabilize revenue and enhance financial resilience despite trade and currency challenges.
Trade tensions and increased expenses could affect Borregaard's revenue and margins, while reliance on agriculture exposes it to sector-specific risks.

Catalysts

About Borregaard

Engages in the development, production, and marketing of specialized biochemicals and biomaterials in Norway, rest of Europe, Asia, the United States, and internationally.What are the underlying business or industry changes driving this perspective?

Strong sales in the agriculture segment, driven by the increasing demand for green and biocontrol products, are expected to positively impact revenue growth and EBITDA margins.
The favorable product mix in BioSolutions, particularly with high-value specialty products, is anticipated to boost overall earnings and contribute to higher net margins.
Tariffs and trade dynamics, although presenting some uncertainty, might have less impact on Borregaard due to its highly specialized products and diverse market presence, thereby potentially stabilizing revenue despite global trade fluctuations.
Continuous investment and focus on operational improvements, such as the electrification of biopolymer spray dryers to reduce energy costs, are likely to enhance net margins over time.
Ongoing currency hedging strategies and anticipated positive currency effects are expected to have a favorable impact on EBITDA and earnings, providing financial resilience amidst currency volatility.

Borregaard Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Borregaard's revenue will grow by 5.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 8.0% today to 13.7% in 3 years time.
Analysts expect earnings to reach NOK 1.2 billion (and earnings per share of NOK 12.41) by about March 2029, up from NOK 620.0 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting NOK1.5 billion in earnings, and the most bearish expecting NOK1.0 billion.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 19.8x on those 2029 earnings, down from 26.7x today. This future PE is lower than the current PE for the GB Chemicals industry at 26.4x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.01%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

The introduction of a 10% tariff on imports from Norway into the U.S. could impact Borregaard's revenues from their U.S. sales, as 10% of their sales last year came from Norway to the U.S. The lower volume of exports due to these tariffs might have a negative effect on revenue.
Increased supply of advanced bioethanol in Europe, based on agricultural waste, is expected to lead to significantly lower sales prices for Borregaard's bioethanol, which could decrease revenue and impact net margins in the Fine Chemicals segment.
Higher wood and logistical costs have increased expenses for Borregaard, which could limit the company's ability to increase net margins and impact overall profitability.
Potential negative effects on global GDP growth from tariffs and trade tensions could ultimately reduce demand for Borregaard's products, affecting revenue growth across its segments.
The strong current reliance on the agricultural sector for BioSolutions' revenues might expose Borregaard to risks associated with any downturn in agriculture or shifts in customer demand, potentially impacting revenues and earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of NOK200.0 for Borregaard based on their expectations of its future earnings growth, profit margins and other risk factors.
However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of NOK240.0, and the most bearish reporting a price target of just NOK175.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be NOK9.1 billion, earnings will come to NOK1.2 billion, and it would be trading on a PE ratio of 19.8x, assuming you use a discount rate of 7.0%.
Given the current share price of NOK165.6, the analyst price target of NOK200.0 is 17.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Adjust Borregaard Price Target and Valuation Following Recent Updates and Ongoing Developments