YIT (Buy, TP: EUR6.00) - Q3 consensus beat – set for more
While in line with our forecasts, the Q3 results beat consensus. YIT still faces margin issues in Business Premises and Infrastructure Projects, but we expect a continued recovery. In our view, the key risk lies in the Housing Development segment battling rising building cost inflation. However, as seen in Q3, YIT seems to be managing both inflation and margin turnarounds well. We see a continued EBIT margin recovery in our forecast period, and expect this topic to be in focus at the CMD. With improving EPS, a low valuation and the upcoming CMD as potential catalysts, we have upgraded YIT to BUY (HOLD) and raised our target price to EUR6 (5).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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