reports
- Simen Mortensen
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.
- Simen Mortensen
YIT (Sell, TP: EUR1.75) - No KPI or EBIT recovery in Q1e
The Finnish residential and commercial real estate markets continue to show no sign of recovery in Q1. While we expect the CEE division to recover, given its minor size, we still forecast group EBIT of zero for Q1. We will look for commentary on the housing shortage and an expected recovery on lower interest rates – a recurring topic the past for three years. We find consensus too bullish and reiterate our SELL and EUR1.75 target price.
- Simen Mortensen
YIT (Sell, TP: EUR1.75) - 2025 set to be another lost year
Q4 EBIT and EPS were well below our forecasts and consensus. However, the main disappointment in the report was the 2025 adj. EBIT guidance – at EUR20m–60m, based on expected Housing completions. We have cut our EBIT forecast to align with the guidance mid-point, while our 2025–2026e EPS are back in negative territory, with the recovery seemingly delayed for another year. We reiterate our SELL, and have cut our target price to EUR1.75 (2).
- Simen Mortensen
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.
- Simen Mortensen
YIT (Sell, TP: EUR2.00) - Set for zero Q4 EPS
We forecast Q4 EPS to be close to zero, in line with Vara consensus; EPS should improve in 2025–2026e but remain low nominally. For the Q4 webcast, we expect the focus to be on capital releases and cost efficiency programmes. We reiterate our SELL and EUR2 target price, finding a better risk/reward elsewhere.
- Simen Mortensen
YIT (Sell, TP: EUR2.00) - New ambitions, but with a condition
At its CMD, the company presented new financial and non-financial targets through 2029. However, these depend on a reversion in the Finnish residential market to an historical average of c16,000 new housing starts annually. Given YIT’s track record of not achieving its financial targets, we have made no forecast changes. We reiterate our SELL and EUR2 target price, finding a better risk/reward elsewhere.
- Simen Mortensen
YIT (Sell, TP: EUR2.00) - Finnish recovery not started yet
According to YIT, the Baltic and CEE residential markets have recovered – but Finland has still to see any sign of a rebound. Reported Q3 EBIT was broadly in line with our estimate, including a EUR6m one-off. The order backlog was down 18% YOY, another concern for us, but we believe it should improve in Q4. However, we continue to see downside risk to consensus, expecting the recovery to be slower than is reflected in the former and the share price. We reiterate our SELL and EUR2 target price.
- Simen Mortensen
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 ...
- Simen Mortensen
YIT (Sell, TP: EUR2.00) - Baby steps on long recovery path
We expect YIT to have seen some recovery in housing KPIs in Q3, but mostly in the CEE and Baltic regions, with the Finnish market remaining slow. Our Q3e EBIT of EUR14m is above Vara consensus, while our forecast of EPS close to zero is in line. We reiterate our SELL but have raised our target price to EUR2 (1.4) on updated peer valuations.
- Simen Mortensen
YIT (Sell, TP: EUR1.40) - Hope and leverage
While the equity burn continued in Q2, the adjusted figures were broadly in line with our forecasts. YIT still expects an improvement on a market recovery; however, as its most recent bond issue shows, it also faces rising financing costs. We believe a Mall of Tripla divestment would help matters, but this could be below book value given market situation. We reiterate our SELL and EUR1.4 target price.
- MarketLine Department
Compagnie d'Entreprises CFE SA - Company Profile and SWOT Analysis
Summary Compagnie d'Entreprises CFE SA - Company Profile and SWOT Analysis, is a source of comprehensive company data and information. The report covers the company's structure, operation, SWOT analysis, product and service offerings and corporate actions, providing a 360˚ view of the company. Key Highlights Compagnie d'Entreprises CFE SA (CFE) is a real estate company providing construction and renovation services. The company offers renovation and construction of residential buildings, offi...
- Simen Mortensen
YIT (Sell, TP: EUR1.40) - Throwing caution to the wind
In Q2, YIT issued a 3-year EUR100m bond with a coupon of 750bp+EURIBOR, in total c11% p.a. While the focus remains on cost cutting and capital release, the strategy seems to be based on recovering markets. It appears that YIT would rather borrow at higher rates to pay off lower-rate debt than to cut prices in its large inventory of unsold homes. In Q2, we expect a 52% YOY decline in adj. EBIT. We reiterate our SELL and EUR1.40 target price. The results are due at c07:00 CET on 26 July.
- Simen Mortensen
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...
- Simen Mortensen
YIT (Sell, TP: EUR1.40) - Q1 misses on EBIT and KPIs
EBIT of EUR-8m was below our estimate and Vara consensus, and unit sales missed too. The inventory of unsold completed homes for sale continued to increase. The company states it will continue to focus on its capital releases, with sale of its stake in the Tripla shopping mall and reducing unsold inventory as the major moving parts. However, YIT’s markets are weak and its debt remains elevated. We reiterate our SELL and EUR1.4 target price, while we believe new equity might be also needed.
- Simen Mortensen
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...
YIT Oyj: 1 director
A director at YIT Oyj maiden bought 12,000 shares at 1.666EUR and the significance rating of the trade was 52/100. 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...
- Simen Mortensen
YIT (Sell, TP: EUR1.40) - A bandage, not a remedy
This morning, YIT announced a refinancing package of EUR100m in liquidity from new equity, a convertible bond and delayed loan amortisations. While this removes the near-term liquidity risk, we believe it remains overleveraged and should continue to focus on further divestments and reducing debt. With a weak market, we still expect low nominal EPS, having further reduced our 2024–2026e on the increased share count and funding cost assumptions. We reiterate our SELL and EUR1.4 target price.
- Simen Mortensen
YIT (Sell, TP: EUR1.40) - 2024 also set to be challenging
We expect improving the balance sheet with capital releases and asset disposals to remain management’s focus in 2024, with the guidance including adj. EBIT of EUR20m–60m due to challenging markets, particularly in Finland. Given current CRE markets, we are concerned the Tripla Mall sale could end up below its EUR192m equity value. We also remain concerned YIT might need to raise equity this year. As expected, the Q4 results were weak, and no DPS was proposed for 2023. We reiterate our SELL and E...
- Simen Mortensen
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 ...
- Simen Mortensen
YIT (Sell, TP: EUR1.40) - Lowering expectations
In recent weeks, YIT has issued several announcements as it adapts to weak markets and works to improve its financial situation. Since our Q4 preview on 4 January, the company has announced it will close its Swedish operation, having sold its equipment services to Renta and issued a profit warning on falling asset values. We have cut our estimates for Q4 and 2023–2026e, reduced our target price to EUR1.4 (1.5), and reiterate our SELL.
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