Peab (Buy, TP: SEK115.00) - Targets imply potential upside
With its Q4 report, Peab announced nine new targets, three of which are financial. The Q4 results beat our forecasts and consensus, but this was thanks to the demerger and listing of Annehem; the recurring operations were in line with estimates. The new EBIT margin target of >6% implies the strongest upside potential versus our forecasts and consensus. We have made minor cuts to our estimates on updated market data and KPIs (order backlog), reducing our 2021e EPS by 2.7% and 2022e by 1.6%. We reiterate our BUY and have raised our target price to SEK115 (100).Peab AB is a construction and civil engineering company. Co. has four business areas: Construction, which performs contract work for external customers and the other units and includes construction of homes and premises to renovation and construction maintenance; Civil Engineering, which engages in the local civil engineering market and in infrastructure projects such as bridges, roads and railways and the management and maintenance of streets and roads; Industry, which delivers asphalt, cement, foundations, electricity, transportation, machine and crane services and prefab to external customers and the other units; and Project Development, which develops 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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