Jm Ab (Hold, TP: SEK300.00) - Higher house prices and higher costs
We are in line with consensus on EPS for Q2 (results due at 08:00 CET on 13 July), and do not expect the quarter to be affected by rising building costs, mainly due to JM’s long-term purchasing agreements. While higher building costs would in theory have lower margins over time, Swedish house prices have also rallied. Therefore, while we have raised our 2022–2023e revenues, our EBIT margin estimates are unchanged. We have cut our target price to SEK300 (320) based on lower peer multiples, but reiterate our HOLD.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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