Jm Ab (Sell, TP: SEK240.00) - Solid Q3, but overvalued
Higher margins and stronger unit sales resulted in Q3 beating our forecasts and consensus. We have raised our 2020–2022e EPS to reflect more units under construction than we expected (+9%) and a reversal of Covid-19 effects in our model. Nonetheless, the valuation looks demanding to us at a P/E next two years following a strong share price performance since June, and we reiterate our SELL. We have raised our target price to SEK240 (210) on our estimate changes.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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