EPS set to fall over time
After the media focus in Q3 soured Swedish market sentiment, we have cut our Q3e units sold. Also, the proposed new LTI amortisation rule, oversupply, and interest hikes make us concerned Swedish house prices will fall long-term, translating into less revenue and lower margins. We expect solid EBIT for Q3 (results due at 08:00CET on 26 October), and we are 5% above consensus as our forecast is based on ongoing production; however, we expect units sold (order intake) to disappoint. We have cut our target price to SEK200 (235) and reiterate our SELL recommendation.JM is a developer of housing and residential areas in the Nordic region. Co. focuses its operations on new production of homes, with the main focus on metropolitan areas and university towns in Sweden, Norway, Denmark, Finland and Belgium. Co. is also involved in project development of commercial premises and contract work, primarily in the Greater Stockholm area. Co. is divided into five business units: JM Residential Stockholm, JM Residential Sweden, JM International, JM Property Development and JM Production.
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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