NYAB extensive report: Premium financials to an attractive price tag

We reiterate our Buy recommendation for NYAB and increase our target price to SEK 7.0 (was SEK 6.8) in connection with updating our extensive report. NYAB, a specialized contractor of complex and challenging construction projects, has diligently navigated recent years’ challenges in the broader construction market. While certainly not immune to tougher macroeconomic conditions (cf. pressured margins FY23-24), the company remains at the top within the industry in terms of growth and profitability. By tapping into the Norwegian market through recent M&A, coupled with significant investments within the company’s target markets, we expect NYAB to continue its strong growth and profitability trajectory in the coming years.

Unique market positioning that facilitates strong growth and industry-leading profitability

In just over a decade, NYAB has evolved from a regionally focused construction firm in Northern Sweden into a leading Nordic provider of complex engineering solutions across the infrastructure, energy, and industrial sectors. Strategic M&A activity has accelerated both geographic expansion and broadening of its service offering, while NYAB’s capital-light and differentiated business model has supported strong, risk-adjusted organic growth. By concentrating on the most value-accretive phases of the project life cycle and outsourcing nearly all production, NYAB can achieve above-industry profitability and a unique degree of scalability. Over the past five years, the company has delivered a 30% revenue CAGR (15% pro forma*) and an average EBIT margin of 9% (7.3% pro forma).

Recent platform acquisition expands the company’s geographical footprint

By NYAB’s measures, the profitability has been relatively modest in 2023-2024 (EBIT-%: 5-7%), reflecting general macroeconomic headwinds (including rising interest rates, inflation, etc.), challenging winter conditions in 2023, and subdued profitability in Finland due to a sluggish market. In 2025, NYAB completed the acquisition of Dovre Group’s Norwegian consulting and international project personnel business. While this move broadens the service offering somewhat and establishes a strategic entry point into the Norwegian construction market, it also temporarily limits margin expansion, as acquired revenue streams are primarily of lower margin. Looking ahead, we expect NYAB’s demonstrated ability to enhance the margin profile of acquired businesses, combined with a gradual recovery in the Finnish market, to drive gradual margin improvement over time. In the short term, however, the Finnish recovery appears to be quite slow, and Dovre’s operations are currently facing regulatory headwinds, reducing the likelihood of a rapid margin uplift. On the positive side, market conditions in NYAB’s largest geographical market, Sweden, remain favorable, with high levels of tender activity. This, coupled with increasing construction investments tied to the green transition, de-globalization, and urbanization trends, creates a solid foundation for NYAB to sustain strong growth and profitability in the years ahead.

Premium financials deserve a premium valuation

NYAB is currently valued in line with traditional construction providers. In our view, this undervalues the company, as it overlooks key structural differences in business models. Given the company’s strong growth, industry-leading profitability, and a capital-light balance sheet that enables greater scalability and financial flexibility, NYAB differentiates itself from conventional construction firms. We believe NYAB's business model aligns more closely with that of an engineering or technical consultancy operator and should be priced thereafter. From several valuation perspectives, we think NYAB is attractively priced, offering a strong upside potential in the stock, driven by anticipated multiple expansions and continued strong earnings growth.