AF Gruppen (Sell, TP: NOK105.00) - Divisional deviations; P/E too high
Adj. EBIT and adj. EPS were marginally better than expected due to a revenue beat. The Building division’s EBIT margin, was weaker than expected, as in Q1. However, this was offset at the group level by much higher than expected profits for the Offshore business. We are in line with consensus for 2022–2024e revenues, and below for 2023–2023e EBIT and EPS. We reiterate our SELL and NOK105 target price. The shares are trading at a 63% premium to peers on P/E, which we see as too high.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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