AF Gruppen (Sell, TP: NOK108.00) - Unwarranted premium to peers
We have cut our revenue forecasts in the face of a deepening residential slowdown, and have reduced our Building division EBIT forecasts on our expectation of more competitive construction markets. We are in line with consensus for Q4e (results due at 07:00 CET on 16 February), having reduced our near-term forecasts based on order backlog data. Given our new forecasts and updated peer valuations, we have lowered our target price to NOK108 (110); with the P/E premium to peers, we reiterate our SELL recommendation.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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