Jm Ab (Sell, TP: SEK130.00) - KPI boost, but weak margins
Driven by investor package sales, JM started and sold more units than expected in Q4. However, even without property writedowns of SEK245m, profit was weaker than expected. Unlike peers, JM reports profit based on a percentage of completion accounting (meaning project starts and units under production). Given the weak Q4 EBIT margin run rate in the ongoing portfolio, we have reduced our 2024–2026e EBIT margins. We reiterate our SELL and have reduced our target price to SEK130 (140) on our lowered EPS 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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