YIT (Hold, TP: EUR7.20) - Trends as expected
Despite the reported EPS miss, the underlying Q4 results were as expected and the best YIT have ever reported. The guidance for 2020 was again very wide, indicating EBIT between EUR150m and EUR190m, and as in 2019 Q4 will be the most important quarter. Valuation remains fair in our view, with 2020e and 2021e P/Es above historical levels. We consider YIT attractive from a long-term perspective, as we expect it to achieve the profitability targets communicated at the 2019 CMD. However, with an updated 12-month target price of EUR7.2 (7.0), we reiterate our HOLD.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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