Peab (Sell, TP: SEK74.00) - Still well below consensus
We remain well below consensus short- and long-term (-3% on Q3e EPS, but -20% on 2026e EPS, the latter explained by our view of the recovery in Property Development profits taking much longer than the market expects and is being priced in). While we have raised our 2024–2026e EPS by 1–4% after increasing our Civil Engineering margin assumptions, and our target price to SEK74 (67), given our view of the downside risk to consensus, we reiterate our SELL. The Q3 results are due at 08:00 CET on 25 October.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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