Peab (Sell, TP: SEK60.00) - High debt, high valuation
Peab announced a solid SE7.2bn in orders in Q2, with several large Civil Engineering jobs. However, we believe the weak housing market remains the main obstacle for normalised ROCE. We are below Infront consensus on 2024–2026e EPS, as we forecast lower Property Development gains. For Q2e, we are 5% below Infront consensus on EBIT, but 11% below on EPS. We believe the housing market recovery will take longer than the market expects, and continue to see a better risk/reward elsewhere in the sector. We reiterate our SELL and SEK60 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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.