Bonava (Buy, TP: SEK115.00) - EBIT margins set to rise long-term
Bonava announced on 8 January that it will book a EUR15m non-recurring cost in Q4 relating to the closure of its Northern Finland (Oulu) operations, and impairment losses from sunk costs for two plots of land elsewhere in Finland. We view these as clean-up costs for exiting some of the weakest-performing markets in the Nordics, and expect margins in Bonava Nordic to improve once the loss-making divisions are closed. We reiterate our BUY, and have raised our target price to SEK115 (110) on our updated peer valuation.
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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