DnB Markets - NCC AB Class B (NCC B) Ncc (Buy, TP: SEK170.00) - Q2: underlying better than reported

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DnB Markets

Simen Mortensen

EUR 467.81 For Business Accounts Only

Ncc (Buy, TP: SEK170.00) - Q2: underlying better than reported

Q2 EBIT was 19% below our forecast and 16% below consensus, but this was due to a miss in the volatile PD division and NCC having hedged the significant supply chain risk it faced entering the quarter. The order backlog missed our forecast, on lower than expected order bookings and larger FX effects. We have updated our forecasts and raised our 2020â€“2022e EPS, having recalibrated our tax cost forecasts. We reiterate our BUY and have raised our target price to SEK170 (165).

17/07/2020 20 EN

Underlying

NCC AB Class B

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.

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SE0000117970 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

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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Analysts

Simen Mortensen

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Solid NCS production in March

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Weekly news, topics & discussion

This week, we published a Q1 preview on Equinor. We believe its share price upswing since its CMU is mainly attributable to strong performance by its peer group. The stock is trading at a 15% premium to peers, in line with its historical average. In other news, Vår Energi reported Q1 production in line with our estimates, with realised prices slightly above. We expect focus in the full Q1 report (due on 23 April) to be on Balder X and Johan Castberg. Also, according to news sources, Equinor’s challenging Wisting project looks set to move forward.

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Ncc (Buy, TP: SEK170.00) - Q2: underlying better than reported

Renovation rules now a reality

Ncc (Buy, TP: SEK150.00) - Q1 was cold

Ncc (Buy, TP: SEK150.00) - Tax-driven EPS beat

Avanza Bank (Hold, TP: SEK257.00) - Understated activity resurgence

Solid NCS production in March

Weekly news, topics & discussion

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