AF Gruppen (Sell, TP: NOK100.00) - Q1 profit warning
AF Gruppen issued a Q1 profit warning after market close on 4 May, stating it would book project losses of ~NOK230m in Sweden. It also said it expects just “slightly positive operating profit for Q1 2023”. Following the update we have cut our 2023e EPS by c26%, also reflecting the remaining production value in loss-making projects and a weaker margin in Building (Norway), which we believe was part of the reason for the comment on Q1 EBIT. We continue to find the P/E premium too high; we reiterate our SELL, and have cut our target price to NOK100 (105) following the profit warning.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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