Pareto Securities identifies a buying opportunity in Norwegian defense contractor Kongsberg Gruppen ahead of an upcoming spin-off, anticipating that the stock will see net inflows following the transaction.
The bank believes the market is underestimating earnings prospects and points to strong growth potential in the remaining operations. Current weakness is viewed as an opportunity to increase exposure.
"KOG has recently lagged the sector, likely due to buyers' reluctance to build positions ahead of a volatile pre-spin-off situation. Capital flows look weak in the short term, but the spin-off should reverse the situation," Pareto noted in a commentary.
The spin-off concerns Kongsberg Maritime, which is set to begin trading as a standalone company on the Oslo Stock Exchange.
Kongsberg Gruppen ASA specializes in the development, manufacturing and marketing of technological equipment and systems for the defence, aerospace, security and critical technology industries. Net sales (excluding discontinued operations) break down by product family as follows:
- defence and aerospace systems (79.6%): command and control, surveillance and reconnaissance, tactical communication, remotely operated weapon stations, long-range missile systems, avionics structures and composite materials products, etc.;
- solutions for the sustainable management of marine resources and climate change monitoring (15.9%): primarily for offshore operations, fisheries, marine research, maritime operations, ocean-based energy production;
- other (4.5%): including digital solutions for the oil, gas and maritime sectors.
Net sales are distributed geographically as follows: Norway (28.2%), Europe (30.2%), North America (31.3%), Asia (5.6%), Australia (4%), South America (0.4%) and Africa (0.3%).
The extraordinary general meeting held on 22 January 2026 approved the demerger of Kongsberg Maritime (merchant vessel systems and offshore drilling systems).
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