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.

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 ...

Sales as expected, deliveries above

Selvaag Bolig ASA: 5 directors

Five Directors at Selvaag Bolig ASA sold 294,695 shares at between 36.840NOK and 37.020NOK. The significance rating of the trade was 55/100. 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 ...

Price momentum building

Selvaag Bolig (Sell, TP: NOK32.00) - DPS recovery still some way off

While we continue to expect KPIs such as sales and starts to improve in 2025–2026, the lead time to profit and dividends remains long, and we continue to see a better risk/reward in peers. Q4 results were, as expected, hit by few deliveries (low season) and one block of delivered (profit-recognised) units being a small rental building. As we roll forward our valuation and publish our 2027 forecasts, we reiterate our SELL but have raised our target price to NOK32 (30).

'25e volume guidance in line

Q4e: Improving market outlook

Taking a hit from smaller unit deliveries in Q4

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.

Selvaag Bolig (Sell, TP: NOK30.00) - KPI recovery, but profits must wa...

In its Q4 trading update, unit sales increased by 39% YOY to 122 (net) and starts by 129% YOY to 298, broadly in line with our forecasts. Although new housing sales will likely recover from the trough on lower interest rates, we expect Selvaag Bolig’s earnings recovery to take longer, and estimate Q4 EBIT down by 16% YOY to NOK108m (results due at 07:00 CET on 12 February). We reiterate our SELL and NOK30 target price.

Construction starts the highlight

It's all about sales momentum from here

Selvaag Bolig (Sell, TP: NOK30.00) - Q3 miss, Urban Property covenants

While Q3 was an expected low season, with few deliveries, EPS was below our forecast on higher costs. The POC EBIT margin also fell more than we estimated, but we expect this to improve in the coming quarters with more starts. The company said it has renegotiated the terms with Urban Property, and the NIBD/EBITDA covenant will now use the POC (NGAAP) figures (previously volatile IFRS figures), thereby removing the potential 2025 covenant breach. However, we continue to find consensus recovery ex...

Running interest payments to UP from 2025e

Back to decent profitability in 2026e

Q3e: EBIT NOK -12m vs. cons. NOK -3m. UP: Divi. reduction or cut the full downside of a covenant breach. Trading at ~12x '26e earnings.

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 ...

Selvaag Bolig (Sell, TP: NOK30.00) - Recovery stalls in Q3

The recovery seen in recent quarters stalled in Q3, with group unit sales and starts down QOQ – unit sales ended 33% below our estimate (and down 51% QOQ), while unit starts were 79% below our forecast (and down 55% QOQ). The full Q3 results are due at 07:00 CET on 7 November, for which we forecast low nominal EPS. We reiterate our SELL and NOK30 target price.

Positive volume deviation and inventory draws

Selvaag Bolig (Sell, TP: NOK30.00) - EPS beat, but DPS delay

Assisted by two divestments, but also a solid underlying EBIT margin on completed developments, Q2 EPS beat our forecast and Bloomberg consensus. However, given its liquidity needs, Selvaag Bolig decided not to pay out a DPS for H1, and stated that it would assess a 2024 DPS after Q4. We continue to expect an improving market, but find the share price too high on 2024–2026e P/E, and reiterate our SELL and NOK30 target price.