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1. Company Snapshot

1.a. Company Description

Skanska AB (publ) operates as a construction and project development company in the Nordic region, Europe, and the United States.It operates through three segments: Construction, Residential Development, and Commercial Property Development.The Construction segment builds bridges, roads, harbors, quays, hospitals, residences, and schools.


The Residential Development segment develops and sells residential projects, including single and multi-family housing.The Commercial Property Development segment initiates, invests in, develops, leases, and divests in commercial properties.It also produces asphalt, gravel, rock, concrete gravel, road construction materials, macadam, and concrete.


In addition, the company engages in the construction and renovation of buildings; provision of infrastructure services, including operation, maintenance, and construction work; stone preservation; and rental of machines and equipment.Skanska AB (publ) was founded in 1887 and is headquartered in Stockholm, Sweden.

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1.b. Last Insights on SKA

Skanska's recent performance is driven by growing confidence in its potential, reflected in an increased fair value estimate from SEK 254.25 to SEK 268.00. The company's selective strategy in the US construction market, particularly in data centers and semiconductors, is a key growth driver. Recent contracts, including a USD 178M road improvement project at Los Angeles International Airport and a USD 148M standby power generation facility in Newark, New Jersey, have boosted order bookings. Additionally, leadership promotions and expansion into new markets, such as Slovakia, have contributed to a positive outlook.

1.c. Company Highlights

2. Skanska's Q3 2025 Earnings: A Strong Performance

Skanska reported a profit of SEK 1.3 billion and an earnings per share (EPS) of SEK 3.07, missing analyst estimates of SEK 5.94. The company's Construction division generated a strong operating margin of 4.2%, driven by a solid project portfolio. Revenue increased by 7% in local currencies, with Construction revenue growth being a key contributor. The company's financial position remains solid, with equity of SEK 60 billion and an equity ratio of 38%. The liquidity situation is also strong, with SEK 28.1 billion in cash.

Publication Date: Nov -10

📋 Highlights

Segment Performance

The Construction division was a standout performer, with a 4.2% operating margin and a 5-year track record of margins above the target of 3.5%. Residential Development in Central Europe was strong, while the Nordic region was weaker. Commercial Property Development signed two large lease contracts in the Nordic and Central Europe, and Investment Property remains stable. As Anders Danielsson noted, "We have a solid project portfolio, and our financial position is strong."

Market Outlook

The market outlook for Construction remains unchanged, with a strong civil market in the U.S. and a more stable market in Europe. Residential Development in Central Europe is expected to remain strong, driven by people moving to capital cities and university cities. The Nordic housing market is expected to recover when consumer confidence improves, driven by economic growth. Commercial Property Development in Central Europe and the Nordics is increasing, with higher leasing activity and a more active investor market.

Valuation

Skanska's valuation metrics appear reasonable, with a P/E Ratio of 16.17 and a P/B Ratio of 1.7. The company's Dividend Yield is 3.3%, and the Free Cash Flow Yield is 15.62%. The Net Debt / EBITDA ratio is -0.49, indicating a strong financial position. Analysts estimate revenue growth at 6.3% next year, which could potentially drive the stock price higher if the company continues to execute well.

Conclusion on Financial Health

The company's strong financial position, with a solid equity ratio and liquidity situation, provides a foundation for future growth. The ROIC of 7.21% and ROE of 10.25% indicate a reasonable return on investment. Overall, Skanska's Q3 2025 earnings report demonstrates a strong performance across several segments, and the company's financial position and valuation metrics suggest a stable foundation for future growth.

3. NewsRoom

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Skanska builds data center in USA worth USD 263M, about SEK 2.6 billion

Dec -04

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Skanska divests the office complex Port7 in Prague, Czech Republic, for about EUR 130M, about SEK 1.4 billion

Dec -03

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Do Recent Project Wins Signal an Opportunity for Skanska Shares in 2025?

Nov -27

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Skanska builds data center in USA worth USD 256M, about SEK 2.5 billion

Nov -25

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Skanska raises its financial target for Construction to an operating margin of ≥4.0%

Nov -18

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Zurich selects Arrowsight to help transform on-site construction safety across the U.S. with proven camera-enabled coaching solution

Nov -14

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Skanska USA announces CFO change

Nov -13

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Skanska USA announces CFO change

Nov -13

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.48%)

6. Segments

Construction

Expected Growth: 4.5%

Skanska AB's 4.5% growth in Construction segment is driven by increasing infrastructure investments, urbanization, and government initiatives. Strong order bookings, efficient project execution, and strategic acquisitions also contribute to growth. Additionally, the company's focus on sustainable and green construction, as well as its expertise in public-private partnerships, position it for continued growth in the sector.

Reconciling Items

Expected Growth: 3.5%

Skanska AB's 3.5% growth is driven by increasing infrastructure investments, urbanization, and a strong order backlog. The company's focus on sustainable and green construction, as well as its diversified business model, contribute to its growth. Additionally, strategic acquisitions and a solid financial position enable Skanska to capitalize on emerging trends and opportunities.

Residential Development

Expected Growth: 5.5%

Skanska AB's 5.5% growth in Residential Development is driven by increasing demand for sustainable and urban housing, strategic land acquisitions, and efficient project execution. Additionally, the company's focus on mixed-use developments and partnerships with local authorities contribute to its growth momentum.

Commercial Property Development

Expected Growth: 4.8%

Skanska AB's Commercial Property Development segment growth of 4.8% is driven by increasing demand for sustainable and energy-efficient buildings, strategic project acquisitions, and a strong pipeline of developments in urban areas. Additionally, the company's focus on mixed-use projects and public-private partnerships contributes to its growth momentum.

Investment Properties

Expected Growth: 4.2%

Skanska AB's 4.2% growth in Investment Properties is driven by increasing demand for sustainable and energy-efficient buildings, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on urban development and mixed-use projects, as well as its strong order backlog, contribute to its growth momentum.

Central

Expected Growth: 4.0%

Central from Skanska AB (publ) achieves 4.0% growth driven by increasing infrastructure investments, urbanization, and government initiatives. Strong project pipeline, efficient operations, and strategic acquisitions also contribute to growth. Additionally, the segment benefits from a diversified portfolio, including residential and commercial developments, which mitigates risks and enhances profitability.

7. Detailed Products

Residential Development

Skanska develops and sells residential projects, including apartments and houses, in Sweden, Norway, and the UK.

Commercial Property Development

Skanska develops and manages commercial properties, including offices, logistics, and retail spaces, in Europe and the US.

Infrastructure Development

Skanska designs, builds, and maintains infrastructure projects, such as roads, bridges, and railways, in Europe and the US.

Construction Services

Skanska provides construction services, including building, civil engineering, and mechanical and electrical installations, in Europe and the US.

Public Private Partnerships (PPPs)

Skanska develops and manages PPP projects, including transportation, healthcare, and education facilities, in Europe and the US.

8. Skanska AB (publ)'s Porter Forces

Forces Ranking

Threat Of Substitutes

Skanska AB (publ) operates in the construction industry, where substitutes are limited. However, the company faces competition from other construction companies, which can be considered as substitutes.

Bargaining Power Of Customers

Skanska 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 customers' ability to negotiate prices.

Bargaining Power Of Suppliers

Skanska AB (publ) relies on various suppliers for materials and services. While the company has some bargaining power due to its large scale, suppliers can still exert some pressure on prices and delivery terms.

Threat Of New Entrants

The construction industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This limits the threat of new entrants and gives Skanska AB (publ) a competitive advantage.

Intensity Of Rivalry

The construction industry is highly competitive, with many established players competing for market share. Skanska AB (publ) faces intense rivalry from other construction companies, which can 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 17.24%
Debt Cost 5.68%
Equity Weight 82.76%
Equity Cost 9.77%
WACC 9.06%
Leverage 20.83%

11. Quality Control: Skanska 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
Balfour Beatty

A-Score: 6.5/10

Value: 5.8

Growth: 6.1

Quality: 4.5

Yield: 4.4

Momentum: 9.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Acciona

A-Score: 6.4/10

Value: 5.4

Growth: 7.6

Quality: 3.9

Yield: 5.6

Momentum: 9.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Sacyr

A-Score: 6.2/10

Value: 5.6

Growth: 5.7

Quality: 3.4

Yield: 7.5

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

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Stock-Card
Webuild

A-Score: 5.9/10

Value: 7.0

Growth: 6.6

Quality: 2.9

Yield: 5.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Skanska

A-Score: 5.8/10

Value: 6.2

Growth: 4.1

Quality: 5.4

Yield: 5.0

Momentum: 6.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
SPIE

A-Score: 5.7/10

Value: 4.4

Growth: 6.1

Quality: 3.4

Yield: 4.4

Momentum: 8.0

Volatility: 7.7

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

247.8$

Current Price

247.8$

Potential

-0.00%

Expected Cash-Flows