Peab (Buy, TP: SEK70.00) - Shy of expectations, but still attractive
Q4 EBIT was in line with consensus and marginally below our forecast, but higher tax costs on accounting effects for 2022 led to EPS falling short. Property Development (PD) profits held up better than we expected, despite very weak KPIs. Construction and Industry EBIT margins were feebler than expected, and the SEK4 (5) DPS proposal also disappointed. We have cut our EPS forecasts on weaker Industry margins and poor PD KPIs. We have trimmed our target price to SEK70 (73) on lowered forecasts, but reiterate our BUY on an attractive valuation.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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