Veidekke (Sell, TP: NOK110.00) - Consensus seems high
The current EBIT margin consensus seems too bullish to us, hence our EPS forecasts are below consensus for both Q2 (report due at 07:00 CET on 18 August) and 2021–2023e. Veidekke’s valuation is also higher than peers’, even adjusting for its NOK2.8bn cash position. Given the downside risk to consensus, we see a better risk/reward among Swedish listed peers and reiterate our SELL. We have also lowered our target price to NOK110 (115) on the reduced peer group pricing.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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