Veidekke (Sell, TP: NOK115.00) - Valuation starting to look rich
While we are in line with consensus on marginally positive revenue growth to 2023e, the EBIT margin reflected in consensus seems too bullish in our view. The stock is also trading at record P/Es, both on our forecasts and consensus. Q1 is low-season for Veidekke, hence we forecast EPS of close to zero (report due at 07:00 CET on 6 May). Given consensus 2022–2023 EPS downside risk and high P/E valuations, we have downgraded from HOLD to SELL, with a new target price of NOK115 (110).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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