Skanska (Buy, TP: SEK210.00) - Balance-sheet strength key
With SEK11bn of cash, we see Skanska well equipped to handle the macro headwinds ahead. We have cut our already below-consensus 2022–2024e residential development (RD) and commercial development (CD) EBIT forecasts. While order intake in Construction was very strong in Q3, the weak RD and CD segments leave us below Infront consensus ahead of the results (due at 07:30 CET on 26 October). Nevertheless, as CD and RD are debt-free with a strong cash position, we believe Skanska offers good risk/reward and reiterate our BUY and SEK210 SOTP-based target price.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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