Veidekke (Hold, TP: NOK98.00) - Pros in line
Veidekke reported Q3 EBITDA and EPS broadly in line with our forecast, but beat our order backlog forecast. However, the weak housing market is apparent in the figures, with only 19 units started in Sweden in Q3. We continue to expect a residential slowdown, but move this from 2020 to 2019 for Property Development based on the webcast comments. However, the order-book beat has raised our construction forecast. The mixed picture resulting from the residential market slowdown leads us to reiterate our HOLD recommendation, while we have trimmed our target price to NOK98 (100).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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