AF Gruppen (Sell, TP: NOK135.00) - DPS more than EPS
AFG proposed an H1 2021 DPS of NOK6.5, thus it appears to be continuing with dividends above EPS, enabled by the ever-increasing share count. While its Q4 report was even better than expected, the order backlog was not. We believe its P/E valuation seems to underestimate the construction risks and is too high versus peers. However, as the attractive dividend yield is seemingly funded by share issues, we still prefer to use P/E. We reiterate our SELL, but have raised our target price to NOK135 (132).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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