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1. Company Snapshot

1.a. Company Description

Peab AB (publ) operates as a construction and civil engineering company in Sweden, Norway, and Finland.It operates through Construction, Civil Engineering, Industry, and Project Development segments.The Construction segment constructs homes, and public and commercial properties; and provides renovation, rebuilding, extension, and construction services.


The Civil Engineering segment constructs and maintains roads, railroads, bridges, tunnels, ports, and other infrastructure.This segment also undertakes landscaping, pipeline, and foundation works; operates and maintains national and municipal highways and street networks, as well as cares for parks and outdoor properties; and operates water and sewage supply networks.The Industry segment offers products and services for construction and civil engineering projects.


It provides mineral aggregates, concrete and paving products, and temporary electricity to prefabricated concrete elements.This segment also rents cranes and machines; distributes binders to the concrete industry; provides transportation services; and recycles production waste and excavated soil.The Project Development segment acquires, develops, and divests residential and commercial properties, and city blocks.


It also rents apartment buildings and single homes.Peab AB (publ) was founded in 1959 and is headquartered in Förslöv, Sweden.

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1.b. Last Insights on PEAB

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1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Should You Reconsider Peab After Its Recent 3.3% Monthly Price Lift?

Sep -28

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How the Stockholm Nursing Home Project Has Shaped Peab's (OM:PEAB B) Investment Narrative

Sep -27

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LVMH: Share transactions disclosure

Sep -09

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The BANK of Greenland issued and early redemption of Senior Non-Preferred capital

Sep -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.94%)

6. Segments

Construction

Expected Growth: 1%

Peab AB's construction segment growth is driven by increasing demand for sustainable infrastructure, urbanization, and government investments in transportation and public buildings. Additionally, the company's focus on digitalization, efficient project management, and strategic acquisitions contribute to its growth momentum.

Industry

Expected Growth: 2%

Peab AB's 2% growth in the construction industry is driven by increasing demand for sustainable infrastructure, government investments in transportation and urban development, and a growing focus on energy-efficient buildings. Additionally, the company's strategic expansion into new markets and its ability to adapt to changing regulatory environments have contributed to its steady growth.

Civil Engineering

Expected Growth: 3%

Peab AB's Civil Engineering segment growth is driven by increasing infrastructure investments in Sweden and Norway, fueled by government initiatives and urbanization. Strong order backlog, efficient project execution, and strategic acquisitions also contribute to the 3% growth. Additionally, Peab's focus on sustainable and digital solutions enhances its competitive edge, attracting clients seeking environmentally friendly and innovative construction methods.

Project Development

Expected Growth: 4%

Peab AB's Project Development segment growth is driven by increasing demand for sustainable urban development, strategic acquisitions, and a strong order backlog. Additionally, the company's focus on digitalization, innovation, and operational efficiency improvements contribute to its growth. Furthermore, the Swedish government's investments in infrastructure and the growing need for climate-adapted construction solutions also support the segment's growth.

Reconciling Items

Expected Growth: 0%

Peab AB's stagnant growth is attributed to declining construction volumes in Sweden, intense competition in the Nordic region, and high operating expenses. Additionally, the company's failure to diversify its revenue streams and invest in digital transformation has hindered its ability to adapt to changing market conditions, resulting in zero growth.

Group Functions

Expected Growth: 0%

Peab AB's stagnant growth is attributed to intense competition in the construction industry, high operating costs, and limited geographical diversification. Additionally, the company's reliance on government contracts and infrastructure projects exposes it to regulatory and budgetary uncertainties, further constraining growth.

7. Detailed Products

Housing Development

Peab AB develops and builds residential areas, apartments, and houses for private and public clients.

Community Development

Peab AB develops and builds community facilities, such as schools, healthcare centers, and other public buildings.

Industrial Development

Peab AB develops and builds industrial facilities, such as warehouses, factories, and logistics centers.

Civil Engineering

Peab AB provides civil engineering services, including road construction, bridge building, and infrastructure development.

Project Development

Peab AB develops and manages large-scale projects, including urban planning, infrastructure development, and construction.

Property Development

Peab AB develops and manages commercial properties, including office buildings, shopping centers, and hotels.

8. Peab AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Peab AB (publ) operates in the construction industry, where substitutes are limited. However, the company's focus on sustainability and environmental considerations may lead to the development of new substitutes in the future.

Bargaining Power Of Customers

Peab AB (publ) has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand reputation and quality of services reduce the likelihood of customers switching to competitors.

Bargaining Power Of Suppliers

Peab AB (publ) relies on a network of suppliers for materials and services. While the company has some bargaining power due to its size, suppliers may still have some negotiating power, particularly in times of high demand.

Threat Of New Entrants

The construction industry has high barriers to entry, including significant capital requirements and regulatory hurdles. Additionally, Peab AB (publ) has a strong brand reputation and established relationships with customers, making it difficult for new entrants to gain traction.

Intensity Of Rivalry

The construction industry is highly competitive, with many established players competing for market share. Peab AB (publ) faces intense competition from both domestic and international companies, which may lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 53.60%
Debt Cost 4.13%
Equity Weight 46.40%
Equity Cost 10.49%
WACC 7.08%
Leverage 115.51%

11. Quality Control: Peab AB (publ) passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Rai Way

A-Score: 7.2/10

Value: 3.1

Growth: 5.7

Quality: 8.5

Yield: 8.8

Momentum: 7.5

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
San José

A-Score: 6.4/10

Value: 7.8

Growth: 7.2

Quality: 5.4

Yield: 3.1

Momentum: 8.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
PORR

A-Score: 6.0/10

Value: 8.7

Growth: 4.4

Quality: 4.5

Yield: 5.0

Momentum: 10.0

Volatility: 3.3

1-Year Total Return ->

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Stock-Card
Peab

A-Score: 5.7/10

Value: 7.1

Growth: 5.2

Quality: 3.5

Yield: 7.5

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Hill & Smith

A-Score: 5.5/10

Value: 3.8

Growth: 6.7

Quality: 7.0

Yield: 3.8

Momentum: 5.5

Volatility: 6.3

1-Year Total Return ->

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Stock-Card
Severfield

A-Score: 4.3/10

Value: 10.0

Growth: 2.8

Quality: 4.6

Yield: 7.5

Momentum: 0.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

79.15$

Current Price

79.15$

Potential

-0.00%

Expected Cash-Flows