NCC (OM:NCC B) has moved into full-scale production on the Horred Breared 400 kV power line after signing a SEK 1b construction contract with Svenska kraftnät, expanding its Nordic infrastructure workload.
Investors have seen NCC’s short-term share price drift, with the stock down about 7% over the past 90 days and about 19% year to date. However, the 3-year total shareholder return of about 79% and 5-year total shareholder return of about 66% point to stronger longer-term momentum. This new run of large contracts, including the SEK 1b Horred Breared power line and recent care and office projects, is likely helping to reframe the company’s position in terms of future workload and risk perception.
Scan other grid and infrastructure builders on our curated 40 power grid technology and infrastructure stocks that, like NCC, are tied into long-duration energy and transmission investments across their pipelines.
NCC shares have pulled back while the order book has filled with long dated power grid and care projects. Is the current valuation already pricing that in, or are investors being paid to wait?
Most Popular Narrative: 12% Undervalued
NCC last closed at SEK178.6, while the most followed valuation narrative points to a fair value of SEK202.5. This frames the current pullback against a higher long run earnings path and margin rebuild.
The company's strong financial position and balance sheet readiness for selective mergers and acquisitions (M&A) can act as a catalyst for future revenue growth and margin expansion. Positive outlook for key contracting segments such as water treatment, energy generation, and infrastructure suggests potential for sustained revenue growth.
See why 11 investors see NCC as 12% undervalued.
Result: Fair Value of SEK202.5 (UNDERVALUED)
Still, the muted property transaction market and potential pricing pressure on less complex projects mean that parts of the NCC narrative could easily be challenged.
Find out about the key risks to this NCC narrative.
Next Steps
Mixed signals on NCC’s outlook can feel confusing, so move quickly from the headline takeaway to your own view by checking the 3 key rewards and 4 important warning signs.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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