Jm Ab (Sell, TP: SEK208.00) - Short-covering propels valuation
Q2 achieved better margins than we expected in the Swedish operations, and Finland lifted the units sold for the group. We have raised our forecasts, and have cut our tax estimate on our recalculation of tax-free rental assets sold. Following our raised forecasts, we have increased our target price to SEK208 (200), but given the recent share price rally, which we expect to be a result of short-covering, we find the valuation rich, 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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