AF Gruppen ASA: 1 director

A director at AF Gruppen ASA sold 40,000 shares at 134.000NOK and the significance rating of the trade was 57/100. 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 two years clearly...

Solid order momentum for the coming quarters

Mixed report - Betonmast margin 4.7%

Quality hiding under the surface

Q3e: Operating PTP NOK 281m vs. cons. NOK 284m. >70% of Sweden revenue has ~6% margin. BUY, TP NOK 150.

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 ...

Betonmast Sweden soon to be history

NOK 100m loss-making production left in Betonmast Sweden. >70% of Sweden revenue has ~6% margin. BUY, TP NOK 150 (155).

LTM FCF/sh NOK 12.6

AF Gruppen (Sell, TP: NOK100.00) - Profit warning: EPS and DPS cut

A profit warning published after market close on 22 August included a NOK240m project writedown in the Offshore division, and guidance for divisional net profit just in the black in Q2. As a result, we have cut our group 2024e EPS by 23.4% and DPS from NOK7 to NOK5. We reiterate our SELL, and believe the size of the 2025e P/E premium to peers is unwarranted given the sector risk (AF Gruppen is not immune, as evidenced by recent project writedowns). Our target price remains NOK100, as we focus on...

PW: NOK 240m project write-down in Offshore

AF Gruppen (Sell, TP: NOK100.00) - Order intake and comments in focus

We are in line with consensus ahead of the Q2 results (due at c07:00 CET on 30 August). However, given announced orders of only NOK2.7bn in Q2, order intake is a key focus point, especially as the book-to-build ratio was 0.95x at end-Q1. With our below-consensus 2024–2026e EPS and a too-high valuation premium to peers, we find a better risk/reward elsewhere in the sector, and reiterate our SELL and NOK100 target price.

Q2 likely not the trigger

Q2e: Operating PTP NOK 271m vs. cons . NOK 300m. >70% of Sweden revenue has ~6% margin. BUY, TP NOK 155.

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...

Hurt by the usual suspects

Q1: Operating PTP NOK 173m vs. cons NOK 230m. Our equity case is broadly unchanged. BUY, TP NOK 155.

AF Gruppen (Sell, TP: NOK100.00) - Streak of consensus misses continue...

EBIT missed consensus for the ninth consecutive quarter in Q1. While the results were good relative to peers, we remain concerned about elevated consensus expectations and the high market valuation. We continue to see downside risk to consensus, and reiterate our SELL and NOK100 target price.

Below expectations driven by the Betonmast units

Renovation rules now a reality

The Energy Performance of Buildings Directive (EPBD) was approved on 12 April, requiring the modernisation of existing real estate in the EU, and will soon enter the Official Journal of the EU. Member states will have two years to incorporate the provisions into their national legislation. While Q1 is Nordic construction’s low season due to winter effects, we see some downside risk to Q1e consensus and longer-term to 2024–2026e EBIT on lower development gains. We recommend a stock-picking approa...

AF Gruppen (Sell, TP: NOK100.00) - Expectations look too high

We continue to see downside risk to consensus, both short-term ahead of the Q1 results (due at 07:00 CET on 15 May) and longer-term (2024–2026e). After a 2023 EBIT margin of 2.5%, consensus is for 4.8% in 2024 and 5.2% in 2025. We believe this is too optimistic, and reiterate our SELL. However, we have raised our target price to NOK100 (95) on increased peer valuation.

AF Gruppen (Sell, TP: NOK95.00) - Q4 disappoints

Following the disappointing Q4 results, explained by lower Betonmast, Sweden, and Offshore margins than we forecast on project writedowns in all three, we have lowered our 2024e Sweden and Betonmast EBIT margins, and in turn cut our group 2024–2026e EPS by c3–4% and our target price to NOK95 (100). We reiterate our SELL.

Renovation regulation approaching

The ‘trilogue’ process regarding the Energy Performance of Buildings Directive (EPBD) that aims to double renovation rates of commercial and residential properties has been concluded, and the new legislative text is due to be published in spring 2024. Also, the recent pivot in market interest rates has improved the sector outlook, but with long profit lead times. Names with high short interest (JM and SBO) have rallied the recently, but we believe the current valuation underestimates the profit ...

AF Gruppen (Sell, TP: NOK100.00) - Valuation still too high

Our Q4 forecasts are broadly in line with consensus, but we find consensus too bullish long-term. The company has already guided that no dividend will be paid for H2 2023. We find the valuation premium versus peers too high based on P/E, despite the share price decline over the past 12 months. We reiterate our SELL but have raised our target price to NOK100 (95) on updated estimates and peer valuations.