Strong orders, but margin setback
Veidekke beat our forecasts on order intake, but fell short on our and consensus EBIT with weaker than expected profitability in the construction segment. The outlook remains strong in civil engineering, but we fear the Norwegian market will remain slow (as seen in Q2) and the peaking Swedish housing markets might slow down. We have cut our EPS forecast on lower margins and have cut our price target to NOK108 (110); we repeat our HOLD recommendation.
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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