YIT (Sell, TP: EUR1.20) - Unquantifiable deleveraging
YIT’s balance sheet disclosures are one of the weakest in the sector. While it aims to divest EUR400m by end-2024, details on these assets and investments are limited. Unlike peers, YIT has not written down shopping centre asset values, and we expect history to be repeated with losses in divestments. The Q3 results fell short of our forecasts, as price cuts hit EBIT more than expected. We reiterate our SELL and have reduced our target price to EUR1.2 (1.3).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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