DnB Markets - Skanska AB Class B (SKA B) Skanska (Sell, TP: SEK160.00) - Faster crystallisation of downside risk

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DnB Markets

Simen Mortensen

EUR 93.09 For Business Accounts Only

Skanska (Sell, TP: SEK160.00) - Faster crystallisation of downside risk

Skanska reported Q2 slightly below Infront consensus, but well below our forecasts. Revenues were much lower in Construction due to Covid-19 effects in Europe. In CD, we expected a low-season quarter with few sales due to Covid-19, but EBIT was weaker than we expected. RD was also hit by low sales due to Covid-19, but a reversal of provisions led to an EBIT beat. We have made minor changes to our forecasts, but remain well below consensus. The Q2 report revealed that the downside risk to revenues and EBIT margins is crystallising much faster than we expected. We reiterate our SELL and SEK160 target price.

24/07/2020 17 EN

Underlying

Skanska AB Class B

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.

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SE0000113250 Nasdaq Nordic Stockholm Sweden

Provider

DnB Markets

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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Analysts

Simen Mortensen

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Skanska (Sell, TP: SEK160.00) - Faster crystallisation of downside risk

Renovation rules now a reality

Skanska (Buy, TP: SEK225.00) - Solid Q1 order intake expected

Skanska (Buy, TP: SEK225.00) - Q4 raises our SOTP

Elkem (Hold, TP: NOK20.00) - Muddling through

ABB (Buy, TP: SEK595.00) - Non, je ne regrette rien

Equinor (Hold, TP: NOK300.00) - Stable valuation relative to peers

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