Veidekke (Buy, TP: NOK135.00) - Two misses in Q1
Q1 adj. EBIT was well below our estimate and consensus, reflecting cost overruns on a low-margin project in Stockholm plus spiralling financial costs, prompting us to lower our 2022e EPS by ~7%. Based on this, the stock recently going ex. dividend, and updated peer multiples, we have lowered our target price to NOK135 (150). However, in our view the valuation remains attractive, particularly given Veidekke’s NOK3.3bn net cash position, and we reiterate our BUY.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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