YIT (Sell, TP: EUR2.00) - 2025 guidance unchanged, we see EPS close to...

Q1 EBIT and EPS saw a healthy beat against our estimates and consensus, driven by a strong sales mix and internal efficiency gains. Unsold, completed apartments fell by 30% YOY, to their lowest level since Q3 2023. We have raised our 2025e EBIT, but do not see this as evidence of a broader recovery in Finnish residential markets. Our 2025e EBIT remains just above the guidance mid-point, with EPS hovering just below zero. We reiterate our SELL, but have raised our target price to EUR2 (1.75).

Essity Aktiebolag (publ): 4 directors

Four Directors at Essity Aktiebolag (publ) bought 27,207 shares at 272.220SEK. The significance rating of the trade was 75/100. 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 ...

Waiting for a volume recovery

Clean EBITA -2% below, Q2 likely better

Clean EBITA SEK 4.7bn vs. cons SEK 4.87bn, -2% below. Margin 13.5% vs. cons' 13.5% (13.1% in Q4) — target is >15%

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.

Two negatives and one positive

Q1 preview

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.

Feb: Pulp shipments +0.3% y-o-y

January: Pulp shipments +6.2% y-o-y

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).

December: Pulp shipments +1% y-o-y

Essity (Buy, TP: SEK340.00) - Currency headwinds overshadow strong und...

Q4 adj. EBITA was 4% below consensus, largely explained by FX weighing on the gross margin, since organic sales growth was in line. In addition, cost pressure has continued in 2025, with Essity guiding for higher capex, marketing and digital investments, as well as FX and currency headwinds. We continue to like the valuation and reiterate our BUY, but have cut our target price to SEK340 (350), mainly on our lower estimates.

Behind the curve, again

Essity (Buy, TP: SEK350.00) - Soft Q4, and CEO stepping down

We consider this a mixed report for Essity, including a slight miss on adj. EBITA, mainly driven by negative currency effects, as sales were in line, and the CEO deciding to leave the company in 2025. We expect consensus 2024–2025e adj. EBITA to come down c1–2% following the report, and believe a negative share price reaction is warranted.

Clean EBITA -4% below, CEO out

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.

Little momentum, more value

Q4 preview

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.