Skanska (Buy, TP: SEK260.00) - Asset sales remain key catalyst
Q3 headline EBIT was below our forecast due to SEK362m in impairments in Residential Development (RD) and Commercial Development (CD). Adjusted for this, underlying EBIT was 6% above our estimate and broadly in line with consensus. With SEK12bn in completed CD projects on the balance sheet, in our view divestments remain one of the biggest potential catalysts to close the gap to the SOTP. We reiterate our BUY and SEK260 target price.Skanska is a project development and construction group, concentrated on selected home markets in the Nordic region, European countries and in the Americas. Co.'s business streams are: construction, which includes building and civil construction; residential development, which develops residential projects for immediate sale; commercial property development, which initiates, develops, leases and divests commercial property projects, with project development focusing on office buildings, retail and logistics properties; and infrastructure development, engaged in identifying, developing and investing in privately financed infrastructure projects, such as highways, hospitals and schools.
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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