Veidekke (Buy, TP: NOK130.00) - Lowered Q4 forecasts
This morning Veidekke announced that project losses of NOK200m and restructuring costs of NOK130m in Construction would be booked in Q4. It announced a 2019 pre-tax profit guidance of NOK940m, leading us to cut our Q4 forecasts. It also issued pre-tax margin target of 3.0–3.5% for continuing operations (Industrial and Construction) in 2020. However, we keep our 2020–21e pre-tax profit margin at 3.1% and 3.2% for these segments, and 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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