Jm Ab (Sell, TP: SEK320.00) - Past still posing consensus risk
Q4 revenues in JM’s Stockholm segment were 26% below Infront consensus and 16% below our estimate, as the weak market in 2018–2020 continues to hurt profits. While the housing market has since recovered, and we note on the Q4 webcast the company indicated it would be a very gradual recovery that would take time to be reflected in the P&L, we see downside risk to consensus. We also believe SBB Norden bid speculation has pushed JM’s share price too far above relevant peers. Thus, we reiterate our SELL and have trimmed our target price to SEK320 (324).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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