Ncc (Buy, TP: SEK125.00) - Mixed Q4
Driven by a large asset disposal gain in the P.D. division, headline EBIT was in line with our estimate but 13% above Infront consensus, despite EBIT in both Building divisions missing our estimates and consensus. A higher tax charge than forecast left Q4 EPS 10% below our estimate (but still 10% above consensus). Given disappointing underlying EBIT margins, we have cut our 2023e EPS by 8% and 2024e by c6%, and in turn our target price to SEK125 (130). However, with an attractive valuation, we reiterate our BUY.NCC AB is a construction and property development company. Co. develops and builds residential and commercial properties, and constructs industrial facilities and public buildings, roads, civil engineering structures and other infrastructure. Co. also provides input materials used in construction and paving and road services. Co. operates three businesses: Industrial, which are based on stone materials and asphalt production, as well as asphalt paving and road services; Construction and Civil Engineering, which consists of NCC Construction Sweden, NCC Construction Denmark, NCC Construction Finland and NCC Construction Norway; and Development, which encompass housing and commercial property.
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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