reports
- 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.
- Simen Mortensen
YIT (Sell, TP: EUR1.50) - First obstacle cleared
On 21 November, YIT announced it had received a EUR140m new term loan and will redeem its 2024 March bond (EUR100m). YIT also sold its renewable energy business and will book a EUR46m non-recurring gain with its Q4 results (due at 08:00 CET on 9 February). Only EUR25m from the asset sale is fixed, with payments in 2024e (EUR10m) and 2025e (EUR15m), and much of the guided Q4 profit is a variable settlement to be paid in 2032e. We reiterate our SELL, but have raised our target price to EUR1.5 (1.2...
- Simen Mortensen
Political agreement for EPBD
Yesterday evening saw a political agreement and the conclusion of the final trilogue meeting on EPBD revisions. There are some revisions to earlier drafts, but EU member states will now prepare requirements for lower energy building stocks. We believe that once in place this regulation should be a positive for construction companies, but CAPEX for real estate companies.
- Simen Mortensen
YIT (Sell, TP: EUR1.20) - Unquantifiable deleveraging
YIT’s balance sheet disclosures are one of the weakest in the sector. While it aims to divest EUR400m by end-2024, details on these assets and investments are limited. Unlike peers, YIT has not written down shopping centre asset values, and we expect history to be repeated with losses in divestments. The Q3 results fell short of our forecasts, as price cuts hit EBIT more than expected. We reiterate our SELL and have reduced our target price to EUR1.2 (1.3).
- Simen Mortensen
YIT (Sell, TP: EUR1.30) - Capital release and refinancing focus
We once again expect a low quarterly EPS, in line with consensus. With two asset sales at undisclosed prices in Q3, we will focus on how much of the planned EUR400m capital release was achieved in the quarter. YIT’s need to refinance is another key focus, where we expect new equity may be necessary. The Q3 results are due at c8:00 CET on 1 November. We reiterate our SELL and EUR1.3 target price.
- Simen Mortensen
Bright spots few and far between
With only three BUYs, we consider bright spots in the sector – just as residential newbuild and commercial development sales in today’s market – few and far between. New housing sales and commercial property markets have been hit by rising interest rates, and the EU’s Energy Performance of Buildings Directive (EPBD) – which holds potential upside – has been delayed. We still prefer stocks with no (or limited) pure residential exposure; our top picks in construction are Skanska and NCC, but, desp...
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