Skanska (Hold, TP: SEK176.00) - Lowering expectations
Skanska has issued a 2017 profit warning while announcing SEK1.5bn in charges in Q4 and another SEK600m in 2018. It guides for cost savings of SEK1bn as it is laying off about 3,000 employees, but we have cut our forecast for the Construction divisions. The rest of our segment forecasts are in line with the 2017 guidance. We have cut our target price from SEK185 to SEK176 and reiterate our HOLD recommendation.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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