* We trim EBIT by 4-3% on slightly lower margins * Strong growth continues, with impressive margin resilience * SEK 6-9 fair value reiterated; trades 5-10% below key peers Impressive growth momentum in the organic business Q3 was characterised by continued strong momentum for the organic Civil Engineering business, where the main market (Sweden) delivered 67% organic growth y-o-y (group organic growth was 32%). Management highlighted that the strong growth has resulted in some short-term margin pressure to prepare for the growth, but that it expect margins to revert once the growth rate moderates a bit. Still, margins in Sweden were 8% (10%), which we think shows that the company can execute well on a higher scale. Meanwhile, in Finland, where demand remains more muted, the margin improved from 7% to 8%. The group EBITA margin also declined from 10% last year to 8% (partly as a result of Sweden, but also from the consolidation of Dovre, although the group's total EBITA grew 29% y-o-y). As management guided for, the focus for Dovre is on improving margins rather than growing, and in Q3 the margin was 5% vs 3% in H1. Thus, we believe the company is delivering well on its objectives in all three core markets (growth in Sweden and margins in Finland and Norway/Dovre). Estimate changes Although we do not think that the overall outlook has changed for the company, accounting for the margin pressure in Sweden makes us trim our EBIT estimates by 4% in 2025 and 3% in 2026-2027. Priced below key peers, despite higher earnings growth After the negative reaction on the Q3 report, the share is -15% L3M vs OMXSGI +5%. This has resulted in a multiple contraction, and the share now trades at 11-8x EV/EBITA on '25e-'27e, which is 5-10% below construction and infra peers. For reference, we forecast 16% EBITA CAGR for NYAB '24-'27e vs consensus' 6-10% for said peers. We reiterate our fair value range of SEK 6-9 per share after the report, as we view the outlook as relatively unchanged.
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