Peab (Hold, TP: SEK85.00) - Seasonal losses expected

Given Peab’s large Civil Engineering and Industry (including Asphalt) operations, it tends to report a loss in Q1. We are broadly in line with consensus for Q1e EPS and order intake, although we are below for 2025–2027e. We believe there is a better risk/reward in peers, and reiterate our HOLD and SEK85 target price.

Peab AB: 4 directors

Four Directors at Peab AB bought 163,500 shares at between 83.421SEK and 83.443SEK. The significance rating of the trade was 80/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last...

Peab (Hold, TP: SEK85.00) - Mixed Q4, but boost from one-offs

Peab reported stronger-than-expected Q4 results on transaction gains in Property Development (PD) and one-offs in Industry (extra government funds in Finland). The underlying market recovered as we expected, with leading KPIs such group order intake and residential unit sales slightly above our forecasts. We have made minor changes to our 2025–2026e EPS, but believe consensus is still reflecting a too-bullish EBIT margin recovery. We reiterate our HOLD, but have raised our target price to SEK85 ...

Solid cash flow and order intake

Peers are more attractive

Wide peer valuation range on market recovery expectations

Various waves of expectations for a recovery in newbuild markets have led to volatility in the sector, but an upwards share-price trend overall. Although we still await proof the new-volume market (both residential and commercial) is recovering, consensus is fuelled by falling rates. However, trailing profits under IFRS valuations are record-wide. We maintain a neutral sector view and stock-picking approach.

Peab (Hold, TP: SEK80.00) - JV accounting gains

We have increased our 2024e EPS by 26% on the announced gain of SEK0.4bn in Q4 following the deal with Balder to break up the Centur JV. Despite the Q4 transactional gain in Property Development (PD), we continue to see downside risk to consensus on bullish EPS expectations longer-term. We reiterate our HOLD, finding a better risk/reward in peers, but have raised our target price to SEK80 (76) on updated peer valuations.

Sharper quarter than anticipated

Solid value-creation from Peab

Peab (Hold, TP: SEK76.00) - Industry beat

Driven by a higher Industry EBIT margin, the Q3 results were above our estimates and consensus. We have raised our 2024e EPS by c17%, 2025e by c6% and 2026e by c8%. However, we continue to see downside risk to consensus, as we expect it to take longer before Property Development (PD) EBIT recovers. We now include our 2027e, have raised our target price to SEK76 (74), and upgraded to HOLD (SELL).

Solid from Industry, est. up

Case has played out

KPIs and profits reflect cycle-lows

While the sector has rallied on expectations of a recovery in Nordic CRE and residential starts, there are no signs of an actual recovery yet. With our base case still for a gradual sales recovery in 2026, our longer-term estimates remain below consensus, reflecting slow profit-recognition under IFRS – the latter also underlies our expectation of declining revenues and EBIT YOY in Q3 for several names we cover. Our sector top picks are still Skanska, NCC and Veidekke, while we see downside risk ...

Peab (Sell, TP: SEK74.00) - Still well below consensus

We remain well below consensus short- and long-term (-3% on Q3e EPS, but -20% on 2026e EPS, the latter explained by our view of the recovery in Property Development profits taking much longer than the market expects and is being priced in). While we have raised our 2024–2026e EPS by 1–4% after increasing our Civil Engineering margin assumptions, and our target price to SEK74 (67), given our view of the downside risk to consensus, we reiterate our SELL. The Q3 results are due at 08:00 CET on 25 ...

Peab (Sell, TP: SEK67.00) - Hot and cold

Despite weaker-than-expected EBIT from Property Development (PD) and fewer sales and no starts, Peab beat our overall adj. EBIT forecast and Infront as the Industry segment achieved EBIT above estimates. While we have raised our 2024–2026e EPS by 8.5–2% on the strong EBIT margins in Industry, we remain concerned about the high consensus for PD gains. We reiterate our SELL on the consensus downside risk, but have raised our target price to SEK67 (60) on updated estimates.

Fine Industry results

Peab (Sell, TP: SEK60.00) - High debt, high valuation

Peab announced a solid SE7.2bn in orders in Q2, with several large Civil Engineering jobs. However, we believe the weak housing market remains the main obstacle for normalised ROCE. We are below Infront consensus on 2024–2026e EPS, as we forecast lower Property Development gains. For Q2e, we are 5% below Infront consensus on EBIT, but 11% below on EPS. We believe the housing market recovery will take longer than the market expects, and continue to see a better risk/reward elsewhere in the sector...

Expectations running ahead

We continue to see upside potential for diversified construction (Skanska, NCC and Veidekke), but downside risk for residential developers (YIT, JM, Peab and Selvaag Bolig) that have rallied on improving market expectations while new housing sales remains lacklustre. We await the adaptation of the recently EU-approved Energy Performance of Buildings Directive (EPBD). We see a mixed picture for EPS ahead of the Q2 reporting season. We keep a neutral sector view, and still recommend a stock-pickin...

Peab (Sell, TP: SEK60.00) - Q1 beat, but still needs to divest

Despite the low season, Q1 beat our estimates, driven by a commercial asset sale in Property Development (PD), while the deviations to our forecasts were less for the other segments. However, with a high level of capital employed in PD and an IFRS net debt/EBIT of c8x, we believe more focus is needed on capital releases and deleveraging. We have raised our 2024e EPS by c16% (transaction-driven) on the strong Q1, but marginally revised 2025–2026e. We reiterate our SELL on the still-high leverage ...

Record-high order intake