Jm Ab (Sell, TP: SEK210.00) - Q3 slight beat, but margins a risk
JM reported Q3 EBIT marginally ahead of our forecast and Infront consensus. While EBIT margins have stabilised in JM Stockholm, we still see downside risk in the coming years. However, we are more concerned about falling margins in JM Sweden. We note management comments highlighting “how high the current margins are in JM Sweden, in a historical contextâ€. We continue to expect consensus EPS to come down for 2020 and 2021, and reiterate our SELL.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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