Signs of sector recovery, and more Q1 results

The markets were much quieter following the Easter break, with limited news; however, the names we cover saw their shares up 2.6% on average, with Atrium Ljungberg (7.1%), SBB (7.1%) and Pandox (4.8%) the top performers. JM released its Q1 results and we reiterated our BUY, believing it has passed the earnings trough, while we reiterated our HOLDs on Corem and Fabege following their quarterly reports. The weighted-average implied EBITDA yields on the stocks we cover are 5.04% for 2025e and 5.34%...

Up to BUY - excessive share price fall

Important year coming up

Entering 2025 with a strong portfolio

Expectations are probably too high

Weekly Real Estate Matrix

Weekly Real Estate Matrix

Q1 reporting begins, volatility persists, CEO to leave and ‘special ex...

The ‘tariff volatility’ in credit and equity markets persisted this week, reversing many of the gains from previous weeks. Atrium Ljungberg kicked off Q1 reporting season. Öresund’s representative left the board of Stenhus and appointed a special examiner to review the company’s management. Castellum’s CEO Joacim Sjöberg stated he plans to leave by Q4 2026. The weighted-average implied EBITDA yields on the stocks we cover are 5.33% for 2025e and 5.66% for 2026e.

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.

Multiconsult (Hold, TP: NOK190.00) - Q1 ‘bridge day’ risk

While Q1 officially had 63 working days, we expect revenue output to reflect c61 days given the two widely taken ‘bridge days’ at the start of January. We thus see some consensus EPS risk ahead of the Q1 results (due at 07:00 CET on 13 May). Given our below consensus forecasts and a lower peer-based valuation, we reiterate our HOLD but have cut our target price to NOK190 (210).

Weekly Real Estate Matrix

Sector recovery on tariff introduction

While still down YTD, the Nordic real estate sector did see a recovery this week on falling interest rates as a result of US tariffs being imposed. Furthermore, we upgraded JM to BUY (HOLD) and published several Q1 previews in the construction sector. The weighted-average implied EBITDA yields on the stocks we cover are 5.06% for 2025e and 5.37% for 2026e.

Selvaag Bolig (Sell, TP: NOK32.00) - Unit sales in line, EPS still tra...

Today’s Q1 trading update showed a unit sales recovery broadly in line with our forecast. However, while starts were above our forecast, our 2025e is unchanged at 700 units. Despite KPIs seemingly recovering as expected, we still see downside risk for the stock given the long lead time to profit and dividends and as the valuation looks high relative to peers. Ahead of the Q1 results (due at 07:00 CET on 21 May), we forecast marginally negative Q1 EPS on few deliveries. We reiterate our SELL and ...

Veidekke (Hold, TP: NOK160.00) - Seasonal low despite mild winter

Q1 is typically the low season for Veidekke on Nordic winter effects and a seasonal EBIT margin decline in the Infrastructure division (including asphalt). Despite the mild winter in the Nordics in Q1, we expect the positive impact to be limited as weather effects tend to affect Q4 more than Q1. We expect zero EPS for Q1. We reiterate our HOLD and NOK160 target price.

Sales as expected, deliveries above

Another round of estimate cuts

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.

Weekly Real Estate Matrix

Weekly Real Estate Matrix

Everything is connected

Geopolitical uncertainty has affected market interest rates and thus the Nordic real estate sector – and we see no near-term fix. The yield gap (risk premium) has remained broadly unchanged in the recent market volatility, meaning interest rates changes explain most of the YTD share price performance – a correlation we expected will continue. The local office rental market remains soft, and we expect the logistics market to follow suit. However, given the deleveraging efforts in recent years and...