SKSBF - Skanska: A Good 2023 But Continued High Valuation

2024-04-28 11:47:53 ET

Summary

• Skanska's operating performance for Q4 2023 was strong, but its stock performance has not outperformed the market.
• The company's construction segment remains profitable, but its property and leasing segments are facing challenges.
• The company's financial position is robust, but its valuation is currently considered expensive. I would consider the company as a "HOLD" at the moment.

Dear readers/followers,

In this article, I mean to provide you with an update on Skanska (SKSBF) (SKBSY). My last update on the ticker in question was back in early December of last year, and I shifted my rating to "HOLD" at that time, from a "BUY". In this article, I will update what I expect for 2024, and as we move into the Q1, we'll see what sort of potential RoR we can forecast and see for Skanska. You can find the last article on the company here.

Skanska, like many infrastructure companies, is at its heart of a very cyclical business - but the company has a very strong operating performance to lean back on for the 4Q of 2023. The company has moved roughly in lock-step with the market over the past 4 months, returning around 8.5% compared to the market at 11%, but around 11% if we include dividends. Not a clear outperformance, and not at any level that I would consider appealing. Also, the company has moved up and down quite a bit....

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