Skanska (Sell, TP: SEK155.00) - Risk in CD and book-to-build
Today Infront consensus for Q1 was released, but given that Skanska only announced four sales for SEK1.4bn in Q1, we see potential downside as we expect lower EBIT in Commercial Development (CD) versus consensus. We are in line on both Construction and Residential Development (RD), while we are concerned about negative book-to-build. We reiterate our SELL and SEK155 target price, as we expect a weakening balance sheet and still-low margins in Construction in 2019. The Q1 results are due at 07:30 CET on 26 April.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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