AF Gruppen (Sell, TP: NOK100.00) - Profit warning: EPS and DPS cut
A profit warning published after market close on 22 August included a NOK240m project writedown in the Offshore division, and guidance for divisional net profit just in the black in Q2. As a result, we have cut our group 2024e EPS by 23.4% and DPS from NOK7 to NOK5. We reiterate our SELL, and believe the size of the 2025e P/E premium to peers is unwarranted given the sector risk (AF Gruppen is not immune, as evidenced by recent project writedowns). Our target price remains NOK100, as we focus on P/E 2025-2026eKilen 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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