YIT (Hold, TP: EUR5.50) - Needs more time to recover
Infrastructure EBIT was weaker than expected in Q2, with the loss due to lower margins on some undisclosed projects. However, thanks to the volume boost in Housing Finland and CEE, group EBIT adj. was marginally better than we expected. We are concerned infrastructure project EBIT margins could remain low in 2021e and that rising building-cost inflation might hurt EBIT in the building divisions, meaning the EBIT margin recovery could be delayed to mid-2022e. With no near-term earnings catalysts, we have downgraded to HOLD (BUY) and cut our target price to EUR5.5 (5.8).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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.