Skanska (Sell, TP: SEK170.00) - Upside potential for Q3 consensus, but downside risk longer-term
With the largest sale in Q3 a residential development, we have raised our forecast for RD, but cut PD. We have also upped our order intake forecast to lower the effects of Covid-19. Ahead of the Q3 results (due at 07:30 CET on 5 November), we see upside potential to consensus. However, with our 2021–2022e EPS well below, we reiterate our SELL, but have raised our target price to SEK170 (160) on updated peer valuation.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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