Ncc (Buy, TP: SEK155.00) - Q2 miss and increased uncertainty
While NCC reiterated its 2023e EPS target of SEK16, the CEO stated: “The market is difficult to assess at this time and we see higher risks than previously.” The company is not passing on higher costs to the same extent as in 2021 and Q1, and rising building and energy costs led to a Q2 EBIT miss, despite a beat on revenues, as margins fell shy of our forecasts. We still consider the stock attractively valued and reiterate our BUY, but have cut our target price to SEK155 (180) on reduced 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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