Veidekke (Hold, TP: NOK95.00) - More residential weakness
Ahead of the Q4 figures due on 8 February (07:00 CET) we are 2% below consensus on EBITDA and 8% below on EBIT. We expect a strong order intake of NOK7.5bn as the company has announced NOK4.1bn in Q4 orders. However, its Q4 unit sales imply a 40% YOY drop in net sales. We remain concerned about a residential slowdown, and have cut our forecasts. We have cut our target price to NOK95 (98) and repeat our HOLD recommendation.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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