Skanska (Buy, TP: SEK205.00) - Impairments hit Q3; we still see value
With non-cash impairments of SEK793m in Residential Development (RD) and Commercial Development (CD), Q3 EBIT missed our forecasts; however, with the stock trading well below invested capital, we argue this should is already reflected the share. Q3 order intake was below our estimate, with record-low unannounced orders. We have cut our 24e EBIT by c4,5%, but have raised 24/25e EPS on our revised net financial forecasts. We reiterate our BUY, but cut our target price to SEK205 (210).Skanska is a project development and construction group, concentrated on selected home markets in the Nordic region, European countries and in the Americas. Co.'s business streams are: construction, which includes building and civil construction; residential development, which develops residential projects for immediate sale; commercial property development, which initiates, develops, leases and divests commercial property projects, with project development focusing on office buildings, retail and logistics properties; and infrastructure development, engaged in identifying, developing and investing in privately financed infrastructure projects, such as highways, hospitals and schools.
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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