Veidekke (Hold, TP: NOK130.00) - Remains fully valued after Q2 miss
Continuing operations EBIT fell short of our forecast in Q2, while reported EPS beat our expectation on one-offs and profit in discontinued operations. However, a high order backlog has led us to raise our EPS forecasts and target price to NOK130 (125). While we expect DPS of NOK30 in the next 12 months (NOK5 for 2019, NOK20 from the PD sale, and NOK5 for 2020e), the valuation of ‘stub’ Veidekke seems rich in our view. We would still like more reassurance that the company can reach its 2022 EBT target. We reiterate our HOLD.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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