AF Gruppen (Sell, TP: NOK120.00) - The ripple effects could be worse
After the Swedish Transport Administration on 19 February stated it was terminating its contract with AF Gruppen for the ongoing E4 Bypass Stockholm project – pointing to contract violations so serious that it intends to file police charges – we have eliminated the order from our backlog and cut our 2025e EPS by c5%. However, if found guilty of the violations in the legal process, we see even greater downside risk that in a worst-case scenario could include the company being excluded from public tenders. We reiterate our SELL and NOK120 target price.Kilen Brygge ASSandakerveien 99B KSAF Gruppen ASA is a contracting and industrial company. Through its subsidiaries, Co. is engaged in property, building, civil engineering, environment, and energy businesses in Norway, Sweden, Poland, and the United Kingdom. Co. has divided the business into five operating segments: Civil Engineering, Building, Property, Environment and Energy.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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