Norway: Best ideas Q2'25

Peab AB: 1 director

A director at Peab AB bought 1,273,500 shares at 85.000SEK and the significance rating of the trade was 73/100. 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 sh...

Peab (Hold, TP: SEK85.00) - Q1 EBIT broadly as expected

Peab reported a Q1 seasonal EBIT loss (as expected), driven by winter-related effects in Industry. We have lowered our 2025e EPS due to the low tax rate in Q1, despite a broadly in-line underlying performance. We have slightly raised our revenue and EPS forecasts for 2026–2027 by c1%. We continue to see better risk/reward in peers and reiterate our HOLD and SEK85 target price.

Fine results from Civil

Norsk Hydro (Sell, TP: NOK55.00) - Q1 shipments delayed to Q2

Norsk Hydro’s Q1 results fell somewhat short of market expectations (EBITDA 4% below consensus) and it cut its Extrusions guidance. A large share of the miss appears to reflect late shipments in the bauxite and alumina (B&A) segment following heavy rainfall, which should mean higher volumes in Q2. We have made only minor changes (-1–0%) to our 2026–2027e EPS. We continue to see downside risk to aluminium prices, and reiterate our SELL and NOK55 target price.

Muted estimate changes

Weak deliveries and higher cost

Heads-up for Q1 report 29 April

Favouring peers

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.

Trade war will hurt demand

Peab (Hold, TP: SEK85.00) - Seasonal losses expected

Given Peab’s large Civil Engineering and Industry (including Asphalt) operations, it tends to report a loss in Q1. We are broadly in line with consensus for Q1e EPS and order intake, although we are below for 2025–2027e. We believe there is a better risk/reward in peers, and reiterate our HOLD and SEK85 target price.

Norsk Hydro (Sell, TP: NOK55.00) - Aluminium defying fundamentals

We reiterate our SELL and NOK55 target price, as we believe consensus EPS and aluminium price expectations are too high. We have seen aluminium prices outperform coal prices by 40% since the summer, defying the fundamental relationship where aluminium prices have been set by its cost of production for the past 15 years. We do not believe a balanced global supply/demand situation is likely to break this correlation. We have reduced our 2026–2027e EPS by 3% due to a stronger NOK versus USD. We est...

Norway: Best ideas Q1'25

Estimates up, share down — for how long?

Norsk Hydro (Sell, TP: NOK55.00) - Soft result in strong market

The Q4 headline results were weaker than consensus and our forecasts, and the proposed 2024 DPS of NOK2.25 was down 10% YOY despite record-strong alumina markets, with aluminium prices at cUSD2,600/t. We still expect aluminium prices to fall towards USD2,200/t as markets remain balanced while input energy costs decline globally, together with weak demand for downstream products. We have raised our 2025e EPS by 7% on high alumina and aluminium prices going into 2025 and 2026e by 1%. We reiterate ...

Underlying inline and cost coming down

Heads-up for report 14 February

Peab (Hold, TP: SEK85.00) - Mixed Q4, but boost from one-offs

Peab reported stronger-than-expected Q4 results on transaction gains in Property Development (PD) and one-offs in Industry (extra government funds in Finland). The underlying market recovered as we expected, with leading KPIs such group order intake and residential unit sales slightly above our forecasts. We have made minor changes to our 2025–2026e EPS, but believe consensus is still reflecting a too-bullish EBIT margin recovery. We reiterate our HOLD, but have raised our target price to SEK85 ...

Solid cash flow and order intake