Skanska (Hold, TP: SEK220.00) - Q3e disappointment ahead
With only SEK6.7bn of announced orders in Q3, we see 30% downside risk to consensus order intake. This, combined with falling new housing sales among peers in Q3, means we also see downside risk to Skanska’s Residential Development (RD) division. Our Q3e group EBIT is 10% below consensus (results due at 07:30 CET on 28 October). We have reduced our target price to SEK220 (250) on updated peer group pricing, but we reiterate our HOLD.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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