Skanska (Buy, TP: SEK255.00) - Volatile miss in Q1

Q1 EBIT missed, as the Residential and Commercial Development divisions had weaker-than-expected results. We have reduced our recovery expectations for these segments due to continued softness in Nordic housing sales and a slow recovery in US commercial property development. However, we still see upside potential in our SOTP-based valuation and reiterate our BUY. Nevertheless, based on our lowered forecasts, we have reduced our target price to SEK255 (270).

Still in a solid position

Solid Construction results

Growing earnings in 2025

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.

Skanska (Buy, TP: SEK270.00) - Q1e risk, but SOTP upside potential

With only a minor SEK110m divestment in ‘Central’ in the quarter, we see downside risk to consensus for Q1. However, supported by a solid balance sheet and investments in Commercial Development (CD), Investment Properties (IP) and Residential Development (RD), we see solid upside potential from an SOTP perspective, and believe capital releases remain Skanska’s main potential share price catalyst. Due to FX, we have lowered our 2025–2027e EPS by c2% on average, and our target price to SEK270 (280...

Skanska AB: 1 director

A director at Skanska AB maiden bought 4,000 shares at 22.777USD and the significance rating of the trade was 72/100. 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 clea...

Skanska (Buy, TP: SEK280.00) - Expecting growth and divestments

The Q4 results were above our expectations and Infront consensus, helped by one-off effects. Due to Skanska’s targeted capital employed in developments, we have increased our Property Development (PD) forecasts. Along with other positive estimate revisions, we have increased our 2025–2026e EPS by c11–9%. We reiterate our BUY and have raised our target price to SEK280 (260).

Residential development is stepping up

Keep it a while longer

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.

Skanska (Buy, TP: SEK260.00) - On course for ATH order backlog

With Skanska having announced orders of SEK27.8bn for Q4, we expect order intake above consensus for the quarter and an all-time-high order backlog (results due at 07:30 CET on 7 February). Our Q4 segment EBIT and EPS forecasts are broadly in line with consensus, while we see continued upside potential to our SOTP. We note Skanska announced divestments of cSEK3.44bn in Commercial Development (CD) and continued its asset (SOTP value) to cash conversion. We reiterate our BUY and SEK260 target pric...

Earnings growth continuing into 2025e

Skanska (Buy, TP: SEK260.00) - Asset sales remain key catalyst

Q3 headline EBIT was below our forecast due to SEK362m in impairments in Residential Development (RD) and Commercial Development (CD). Adjusted for this, underlying EBIT was 6% above our estimate and broadly in line with consensus. With SEK12bn in completed CD projects on the balance sheet, in our view divestments remain one of the biggest potential catalysts to close the gap to the SOTP. We reiterate our BUY and SEK260 target price.

US election trumps Q3 report

Rebound potential in development streams

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 ...

Skanska (Buy, TP: SEK260.00) - Set for Q3 order intake beat versus con...

Our Q3 order intake forecast of SEK54.9bn is 71% above post-Q2 Infront consensus (results due at c07:30 CET on 6th November) after Skanska announced orders of SEK32.5bn during the quarter. However, with just one divestment in Commercial Development (CD), our EBIT is below consensus. Given the discount to our SOTP, and our raised growth expectations on the strong order intake, we reiterate our BUY and have raised our target price to SEK260 (250).

Skanska (Buy, TP: SEK250.00) - Solid where it counts

Q2 EPS (segment reporting) was 10% above Infront consensus and in line with our forecast. With two large US orders announced last week and included in Q2, order intake of SEK60.7bn beat our estimate by 45% and consensus by 41%. The Construction EBIT margin also beat our forecast. Following the beat, we have raised our 2024–2026e revenues by c1% and EPS (segment) by c3%-c4%. We reiterate our BUY and have increased our target price to SEK250 (230) on our raised SOTP.

Order intake 41% above consensus