Novonesis: Initiating Coverage With a Wide Moat Rating and a DKK 395 Fair Value Estimate

We are initiating coverage of Novonesis with a fair value estimate of DKK 395 and a wide economic moat rating. Novonesis stands for “new beginning” and is the fitting new name for wide-moat Novozymes following the completion of its merger with wide-moat Chr. Hansen. As a result of the combination, the company boasts a dominant market position across two consolidated biosolutions markets: enzymes and cultures, with a market share of nearly 50% in both. Our wide moat rating is based on the company’s powerful intangible assets, switching costs, and cost advantage. At current levels, the shares trade in 3-star territory but still offer an upside of around 8%.