Bonava (Hold, TP: SEK121.00) - Set for lower margins, despite improving market
Bonava reported Q2 EBIT in line with our forecast; however, this was inflated by plot sales, indicating an underlying miss. Consumer sales were broadly in line, but the volatile investment sales were below our forecast. On the Q2 earnings call, management highlighted that margins in Sweden have not yet been hit by the 2018–2019 price cuts due to lagging accounting principles. We reiterate our HOLD, but have raised our target price to SEK121 (115).
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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