Skanska (Buy, TP: SEK215.00) - Q4 set to be a mixed quarter
Q4 was an eventful quarter, with 23 announced orders, one order termination, five asset sales, and a SEK2bn profit warning on its development assets. We still expect good volumes in construction, but low new housing sales in RD. However, we forecast a new housing recovery by 2026 with lower interest rates. We continue to use a discount on Residential and Commercial Development (CD, RD) and Investment Properties (IP), assuming falling asset’ values, but our SOTP still suggests upside potential in the share. We reiterate our BUY and have raised our target price to SEK215 (205).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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