Veidekke (Buy, TP: NOK130.00) - Low season to strike Q1e
Due to seasonal winter effects, we expect Q1 EBIT to be fairly close to zero (results due at 07:00 CET on 11 May). We believe the key focus points in the report will be any market comments and the margin guidance. On 30 March, the company presented its Scandinavian construction market outlook, indicating a decline of 8.0% in 2023–2024, in line with our expectation (although our forecasts imply a larger decline in 2023 and a smaller one in 2024). However, based on the reported 108% book-to-build ratio as of Q4 2022, we forecast a flattish revenue profile for 2023–2025. We reiterate our BUY and NOK130 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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