Strategic and Financial Valuation of Skanska AB

Jon Fredrik Widfeldt & Sebastian Thomas Herman Schleutker

Student thesis: Master thesis

Abstract

In this thesis, we conducted a fundamental valuation of Skanska AB, a multinational construction company listed on the Stockholm Stock Exchange. The findings are based on strategic as well as financial assessments. As an addition to the fundamental valuation, we have conducted an extensional analysis where
we adjusted the stock price for Environmental Governmental Social (ESG) factors.
Market situation The global economy is experiencing growth. This growth is
transferred to the construction industry with a correlating GDP development. Market growth potential is peculiarly high in the U.S. construction market, where the growth is expected to generate strong revenue development.
Mitigating growth factors include steep increases in material prices and shortage of labour. Further, prevailing uncertainties are associated
with Brexit and trade policies.
Skanska remains financially strong The conducted financial analysis
indicates a continuous strong financial position with low debt levels and
large cash reserves. The financial strength is expected to be maintained, which supports future growth and a preserved strong market position.
Environmental Social Governance
The business environment is changing with international climate efforts and United Nations sustainability goals. The implementation of ESG activities by Skanska gives additional information that traditional accounting and financial information could never answer. Based on ESG factors, the adjusted valuation generated a stock price increase of 2.06%.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final ThesisMSc in Strategy, Organization and Leadership, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2018
Number of pages133
SupervisorsDaniel Beunza