YIT (Hold, TP: EUR5.50) - Weak Q2, but guidance supportive
YIT’s Q2 fell well below our and consensus forecasts, with weaker EBIT in all but Finnish housing. However, it kept its EUR130m–160m EBIT adj. guidance for 2018, based on the planned asset sale of commercial office buildings in Helsinki. Along with higher production volumes and order backlog, this has led us to raise our forecasts. As a result we have raised our target price to EUR5.5 (5), while we reiterate a HOLD recommendation, albeit with our forecasts still well below consensus.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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