Ncc (Buy, TP: SEK130.00) - EBIT-margin stability in focus
NCC’s EBIT-margin recovery has seen some hiccups, and most recently Q1 underlying margins were weaker than weexpected, though this was offset by transaction gains. Thus, our focus is on the underlying margins for its construction operations in Q2. Although we are just (broadly) in line with consensus on Q2e and longer-term, we believe Q2e results in line with our forecasts would improve investor confidence and boost the share price. We reiterate our BUY and SEK130 target price.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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