YIT (Buy, TP: EUR5.50) - Limited Covid-19 disruption in Q2e, but economic effects hit forecasts
With productivity largely unaffected, we expect only a limited Covid-19 impact in Q2, and have made minimal changes to our estimates for the quarter (results due around 08:00 CET on 28 July), and remain broadly in line with consensus. Longer-term, however (2020–2022e), we are concerned Partnership properties (commercial) and Residential developments face headwinds in the worsening economic climate, prompting us to cut our 2020–2021e EPS. We have also trimmed our target price to EUR5.5 (5.6) to reflect our updated forecasts and higher peer multiples, but reiterate our BUY on an attractive valuation.YIT provides services for the construction sector. Co. has two segments: Housing and Business Premises and Infrastructure. The Housing segment is engaged in the development and construction of housing, holiday homes and entire residential areas, with a focus on its own developments. This segment is also engaged in property maintenance in Russia. The Business Premises and Infrastructure segment is engaged in the development and construction of offices, shopping malls, public facilities, assisted living facilities and other business premises; renovation projects; construction of roads, bridges, tunnels, rail and metro stations, ports and power plants; as well as road and street 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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