AF Gruppen (Sell, TP: NOK105.00) - Q3 miss
Q3 EPS adj. was 38% below our estimate and Infront consensus on the back of project writedowns. While project losses are a risk faced by all construction companies, this does not seem well enough reflected in AF Gruppen’s premium valuation relative to peers, in our view. We have lowered our 2022e EPS by 10.6% but – despite larger 2023–2024e EBIT cuts – we have reduced our 2023e EPS by only 2.6% and raised our 2024e EPS by 0.5% due to our recalculated expected minority profits. Our EPS forecasts are still 10–14% below pre-Q3 consensus. We reiterate our SELL and NOK105 target price.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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