Skanska (Sell, TP: SEK155.00) - Once bitten, twice shy
The CMD is due on 21 March at 09:30 CET (postponed from 27 November). There were six quarters with project write-downs in the US and four in Europe in 2017–2018 and the proposed DPS for 2018 was down 27.2% YOY. We see potential downside risk with weak construction margins and weak housing sales. We have downgraded to SELL (HOLD), but reiterate our SEK155 target price. We expect the focus to be on improving earnings, and fear possibly lowered financial targets.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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