Jm Ab (Hold, TP: SEK320.00) - Valuation looks a tad too high
We forecast EBIT 4% below Infront consensus and EPS 3% below for Q3 (results due at 08:00 CET on 28 October). This difference reflects our concern that lower YOY production in JM Stockholm has hurt profits. JM’s valuation is at a premium to peers, which, in conjunction with our above-consensus forecast has led us to see better risk/reward elsewhere in the sector. We reiterate our HOLD, but have raised our target price to SEK320 (310) on our updated forecasts.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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