Peab (Hold, TP: SEK52.00) - Q4 as warned
The results were in line with the profit warning on 18 January, and with updated residential volume profits, we have increased our 2024e EPS by 1.4%, 2025e by 3.7% and 2026e by 6.6%. There are still no reported datapoints on an improving market for new housing sales, but we continue to expect an improvement with lower mortgage rates later in 2024e and 2025e. However, after Q4 writedowns, EBIT margins in contracting divisions may remain below historical levels in 2024–2025. We find the valuation fair and reiterate our HOLD, but have increased our target price to SEK52 (48) on higher peer 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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