Veidekke (Hold, TP: NOK90.00) - Realistically trimmed ambitions
Veidekke reported its Q1 and hosted a CMD on 9 May. Q1 EBIT was in line with our forecast, while revenues were higher. At the CMD, the company cut its financial targets, but provided divisional targets for all segments on when margins should improve. It also said focus will be on profitability over growth towards 2022e. Though the Q1 results were broadly in line for most segments, a 5% beat in the Q1 order backlog has led us to raise our forecasts. However, the new target to raise the equity ratio to 25% has led us to cut our DPS forecasts. We reiterate our HOLD and NOK90 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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