Peab (Hold, TP: SEK55.00) - Low-season and weak KPIs
Due to winter effects, Q1 was as expected low season for Peab. However, the seasonal losses in Industry were marginally lower than we expected, and volumes in Construction slightly higher. This helped to offset a weak quarter for Property Development (PD), with units sold down 69% YOY and order bookings below our estimate and Infront consensus. We continue to see consensus downside risk in PD, and given Peab’s financial leverage, we find peers offer better risk/reward. We reiterate our HOLD and SEK55 target price.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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