Bonava (Buy, TP: SEK100.00) - Attractive risk/reward
We had already reduced the value of the St. Petersburg division before Bonava confirmed its closure; in our view, the recent drop in the share price reflects the Russian loss many times over. Rising building cost inflation has become the new risk; however, we continue to expect Bonava to limit the effects. We are 9% below consensus on Q1e revenue and 30% below on EBIT (results due at c07:00 CET on 28 April), having adjusted our forecasts for correction to the original Q1 guidance. Fundamentally, we continue to see an attractive risk/reward, and reiterate our BUY and SEK100 target price.Bonava AB (publ). Bonava publ AB is a Sweden-based company, which is primarily involved in real estate development industry. The Company operates as a developer of housing units to consumers and investors in Sweden, Germany, Finland, Denmark, Norway, the Russian Federation, Estonia and Latvia. In Germany, the Company's offering is targeted at consumers and investors through both single-family houses and multi-family houses. The Company operates on the basis of an own-produced construction system in Germany, which is used in all new construction, thus enabling an efficient construction process. In Estonia and Latvia, the Company's offering is primarily targeted at consumers, based on multi-family houses. In Russia, it operates solely in Saint Petersburg region with offering comprises of multi-family houses.
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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