Return of the Swede - performance picking up

XXL ASA: 3 directors

Three Directors at XXL ASA sold 40,572,464 shares at 10.000NOK. The significance rating of the trade was 89/100. 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 s...

Small improvements, more to come

Q1 in line, introduces 2028 targets

XXL ASA (Hold, TP: NOK11.00) - Encouraging LFL growth

The Q1 results were below expectations, but we find the positive LFL growth encouraging amid challenging winter conditions and years of consecutive negative LFL growth. We have reinstated our recommendation at HOLD (NO REC) and target price at NOK11 (N/A), as the earnings trend remains subdued and near-term multiples and financial risk are high. However, this is partly offset by Frasers' NOK10 per share bid for the company.

XXL ASA (No_rec, TP: NOK) - Q1 below, but back to growth

We consider this a slightly negative report for XXL, including figures below expectations despite revenue growth in a quarter with challenging winter conditions. We expect consensus 2025e EBITDA to come down 3–5% and find a slight negative share price reaction warranted.

Up to BUY - excessive share price fall

Mixed upside potential, despite market recovery expectations

Pent-up demand and falling interest rates remain the backbone for newbuild recovery expectations. However, as the recovery has not yet started, property developers screen as the most attractive long-term, but visibility remains mixed. Diversified construction companies are more attractive on near-term P/Es, although many seem to be fully valued on solid share-price performance over the past six months. We maintain a neutral sector view; NCC and Skanska are our top picks.

AF Gruppen (Sell, TP: NOK120.00) - Q1 results are secondary

Given the E4 Bypass Stockholm project cancellation and the filing of fraud charges with the Swedish police by Trafikverket, our focus will be on the company’s position in Sweden, not its Q1 results. AF Gruppen has released limited details on the Trafikverket situation and has denied the charges. Ahead of the results (due at 07:00 CET on 15 May), we are below consensus on Q1e EBIT, despite being at the consensus midpoint. We reiterate our SELL and NOK120 target price.

AF Gruppen (Sell, TP: NOK120.00) - The ripple effects could be worse

After the Swedish Transport Administration on 19 February stated it was terminating its contract with AF Gruppen for the ongoing E4 Bypass Stockholm project – pointing to contract violations so serious that it intends to file police charges – we have eliminated the order from our backlog and cut our 2025e EPS by c5%. However, if found guilty of the violations in the legal process, we see even greater downside risk that in a worst-case scenario could include the company being excluded from public...

Higher uncertainty — down to HOLD

Large contract termination and serious allegations

Starting to show its true earnings power

AF Gruppen (Sell, TP: NOK120.00) - Too-high valuation and expectations

AF Gruppen reported Q4 revenue and EBIT above well our forecasts and Bloomberg consensus. Given the gross figures were boosted by minority share of profits and IFRIC15 accounting effects, the adj. EPS was still just 2% above our estimate and 7% above Infront consensus. We have raised our EPS for 2025e by c5% and 2026e by c4%. As we publish our 2027 forecasts, we have rolled forward our valuation, and thus have raised our target price to NOK120 (115). We reiterate our SELL.

Sweden and Betonmast surprises on the upside

XXL ASA (No_rec, TP: NOK) - Some early signs of recovery

XXL reported weak figures as pre-warned, but with signs of light as revenues and gross margins appear to have started to recover from low levels, supported by its strategic initiatives. We continue to find the balance sheet soft, but the NOK600m rights issue targeted for March should ease the situation somewhat.

XXL ASA (No_rec, TP: NOK) - Q4 weak as warned

We consider this a weak report for XXL, including figures slightly above the pre-warned levels, but badly hit by non-recurring costs. We expect 10–20% negative revisions to consensus 2025e EBITDA and believe a negative share price reaction is warranted.

Q4e: Improving market outlook

All-time high order intake

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.