Peab (Buy, TP: SEK73.00) - Consensus risk, but solid DPS
We are slightly below consensus EPS for Q4e (results due at c08:00 CET on 3 February), but also for 2023e and 2024e as the Nordic private real estate and residential markets are expected to weaken on higher interest rates, causing us to forecast a marginally negative EPS trend for 2022–2025e. However, given the drop in its share price over the last year, we believe most negatives are priced in and reiterate our BUY and SEK73 target price, with an annual 8%+expected dividend yield 2022-2025e.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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