Sweco (Buy, TP: SEK150.00) - Well positioned for strong Q4
We expect Q4 sales growth of 19% YOY on higher average contract fees offsetting high cost inflation and strong underlying demand in most regions supporting c8% organic growth YOY. We forecast an adj. EBITA margin of 10.7%, up 20bp YOY, backed by solid organic growth, efficiency improvements, and cost control, albeit partly offset by low profitability in the UK and Finland, which are affected by workforce right-sizing and corresponding restructuring costs. We reiterate our BUY but have raised our target price to SEK150 (140) on a slightly more optimistic outlook beyond 2023.
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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