Strong Finish for Novozymes; Growth Guidance Range Is Wide Again

Wide-moat Novozymes reported 7% organic growth in the fourth quarter and 6% for the year, beating company-compiled consensus on continued strength in grain and tech processing and food, beverages and human health. The full-year EBIT margin of 26.8% was in line. Shares were trading flat intraday, likely due to 2022 guidance being broadly in line. The growth guidance range is wide again for 2022 due to market volatility from the continued impact of the coronavirus pandemic. Novozymes expects organic growth of 3%-7% and an EBIT margin of 25%-26%. This is in line with our forecast for 5.7% organic growth and an EBIT margin of 26%. Consequently, we don’t expect to make a material change to our DKK 375 fair value estimate. At current levels, shares look overvalued.