Ncc (Buy, TP: SEK140.00) - Margin-driven beat in Q2
The Q2 results beat our estimates and Infront consensus across the board, fuelled by a faster EBIT margin recovery than expected. Management reiterated its SEK16 EPS target for 2023, while adding that it could take longer to reach. Our 2023–2025 EPS forecasts (and consensus) remain well below SEK16; however, we find the underlying margin trend and valuation attractive and reiterate our BUY, while we have raised our target price to SEK140 (130) after increasing our forecasts.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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