Veidekke (Buy, TP: NOK125.00) - Attractive EV/EBIT
With its strong cash position, Veidekke is one of the most attractive names in the sector on EV/EBIT in our view. While its cash position should support a high DPS to EPS ratio, we expect M&A-driven earnings growth as the cash cannot be paid out as dividends due to equity requirements. After updating our forecasts, we are in line with consensus on Q4e EBIT, but above on EPS. We reiterate our BUY and NOK125 target price.Veidekke is a Scandinavian construction and property development company. Co.'s segments are grouped according to activity. The construction segment comprises mainly the construction of buildings and infrastructure. The property segment comprises the development of sites, property development and the sale of property (primarily residential). The industry segment comprises the production of aggregates (crushed stone and gravel) and asphalt, the laying of asphalt and road maintenance.
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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