Husqvarna (Sell, TP: SEK63.00) - Pressure persists

Continued weak end-market demand, lower production volumes, and a legacy-business exit weighed on sales and earnings in Q1. We expect organic growth and earnings to remain under pressure in 2024. Following the Q1 results, we reiterate our SELL and SEK63 target price.

Cautious optimism ahead of Q2

-11% org. growth, partly due to normalised robotics sales. We see good prospects for improvements in Q2'24e. Lacking short-term triggers for re-rating, we reiterate HOLD.

Q1 figures roughly in line

Dometic (Buy, TP: SEK100.00) - Recovery taking time

Overall, Q1 was below consensus, driven by surprisingly weak performance for Land Vehicles Americas where Dometic said the competitive environment was tough. We have cut our 2024–2026e adj. EBIT by c3% on average and reduced our target price to SEK100 (105). We reiterate our BUY, seeing c25% upside potential from the current share price to our target price, but have pushed a recovery out in time.

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...

Dometic (Buy, TP: SEK105.00) - Motoring on

We estimate Q1 sales of SEK6,614m and adj. EBIT of SEK595m (adj. EBITA of SEK745m). Q1 tends not to be a seasonally strong cash flow quarter and we expect end-Q1 net debt/EBITDA of 2.8x. We have increased our 2024–2026e adj. EBIT by c4% on average, reflecting updated FX and somewhat higher profitability. We reiterate our BUY and have raised our target price to SEK105 (100) on updated valuation and estimates.

Selvaag Bolig (Sell, TP: NOK25.00) - Inventory spike set to delay prof...

In its Q1 KPI update, sold homes were marginally above our forecast, helped by sales to its main owner. However, of the 236 completed units, only 179 were delivered to clients. Unsold inventory climbed to an all-time high of 126 units at end-Q1 (ATH), and 56 completed sold homes are pending delivery. Due to the inventory build-up, we have cut our 2024e EPS by c29%, but have raised 2025e EPS by c42.5%. We reiterate our SELL and NOK25 target price.

Husqvarna (Sell, TP: SEK63.00) - Tough Q1 expected

We forecast weak consumer demand, lower volumes, negative mix, high robotics comparables, and a partial exit from its combustion engine business (worth cSEK750m of sales) to weigh on sales and EBIT in Q1, with market dynamics and a consumer environment similar to H2 2023. We forecast a Q1 sales decline of 9% YOY and an adj. EBIT margin of 11.4%, down 260bp YOY. We reiterate our SELL and SEK63 target price.

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...

Dometic Group AB: 1 director

A director at Dometic Group AB bought 3,081 shares at 78.302SEK and the significance rating of the trade was 50/100. 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 clear...

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.

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...

Selvaag Bolig (Sell, TP: NOK25.00) - Q4 miss

Q4 earnings (IFRS and POC) missed our forecasts, and the proposed H2 2023 DPS of NOK1 was below our expectation. While we expect sales to gradually recover in 2024–2026 on lower mortgage interest rates, we do not see the company returning to historical profitability levels in our forecast period due to lagging profit recognition (IFRS – IFRIC15) and accumulated capitalised interest rate expenses raising land bank costs. We reiterate our SELL and NOK25 target price.

Husqvarna (Sell, TP: SEK63.00) - Under pressure

We reiterate our SELL and have lowered our target price to SEK63 (65), as we cannot extrapolate Q4’s strong growth in professional robotics into 2024, weak consumer demand and macroeconomic headwinds should weigh on sales and earnings in H1, and longer-term we remain cautious on the impact of the transition to electrification on margins.

Husqvarna Minor model adjustments

We have updated our estimates, owing to updated FX, minor adjustments to our adj. EBIT assumptions and one-offs in Q4 2023 (results due at c07:00 CET on 2 February). We do not consider these changes to be material, and we have not changed our SELL recommendation. We reiterate our SEK65 target price.

Dometic (Buy, TP: SEK100.00) - US RV trough probably behind us

Q4 is a small quarter, but overall was below our estimates and consensus, driven by weaker than expected organic growth and margins. We have cut our 2024–2025e adj. EBIT by c6% on average and have lowered our target price to SEK100 (105). The US RV OEM trough has seemingly passed and sales in Service and Aftermarket (including within Marine) continue to improve. We reiterate our BUY.

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 ...

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.

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...

Selvaag Bolig (Sell, TP: NOK25.00) - Long-tail impact

The Q4 trading update revealed weaker sales and starts than we forecast; however, we continue to expect sales to recover in 2024–2025, and almost get back to pre-pandemic levels by 2026, but earnings to only normalise beyond 2026 given weak 2022–2023 markets and long profit lead times. The valuation still looks stretched to us and consensus too bullish; we reiterate our SELL, but have edged up our target price to NOK25 (24).