Last Update04 Aug 25Fair value Increased 25%
The significant upward revision in Koninklijke Heijmans' consensus price target reflects improved profitability, as evidenced by a rising net profit margin, and a slightly higher market valuation, resulting in the target increasing from €56.12 to €70.38.
What's in the News
- Reaffirmed 2025 earnings guidance, projecting turnover of approximately EUR 2.7 billion for the year.
Valuation Changes
Summary of Valuation Changes for Koninklijke Heijmans
- The Consensus Analyst Price Target has significantly risen from €56.12 to €70.38.
- The Net Profit Margin for Koninklijke Heijmans has significantly risen from 5.04% to 5.91%.
- The Future P/E for Koninklijke Heijmans has risen from 13.06x to 13.94x.
Key Takeaways
- Large public infrastructure investments and ongoing adoption of modular, digital construction methods position Heijmans for sustainable revenue growth and margin expansion.
- Strong project pipeline and financial flexibility enable strategic growth, with housing demand and energy transition trends offering further upside potential.
- Political and regulatory uncertainty, operational bottlenecks, labor shortages, and intensified competition threaten revenue growth, margin stability, and Heijmans' ability to scale within the Dutch market.
Catalysts
About Koninklijke Heijmans- Engages in the real estate, construction, and infrastructure businesses in the Netherlands and internationally.
- Heijmans is poised to benefit from significant, multi-year public investments in infrastructure and defense construction driven by government stimulus programs and climate adaptation needs, with recurring and expanding contracts (such as extensions at Schiphol and major flood protection projects) providing strong revenue visibility and supporting future earnings growth.
- Sustained demographic pressures and urbanization in the Netherlands are fueling a persistent housing shortage, and regulatory or political improvements enabling capacity additions (especially in suburban and modular housing) could unlock rapid volume expansion and operating leverage, leading to meaningful revenue and net margin growth.
- Ongoing adoption of industrialized, modular, and digitalized construction methods (e.g., automation, offsite fabrication, BIM, and timber frame housing factories) positions Heijmans to accelerate margins over volume, realize efficiency gains, mitigate labor shortages, and support net margin expansion over the next several years.
- The company's robust and high-quality order book, strategic partnerships, and pipeline of technical service and energy transition projects (particularly in infrastructure and energy network segments, which grew over 50%) suggest the current revenue base is well-supported and set to grow, especially as energy transition and sustainability tailwinds intensify.
- M&A capacity and a healthy balance sheet enable optionality for strategic acquisitions in property development or infrastructure, potentially bolstering revenue scale and accelerating medium-term net profit growth.
Koninklijke Heijmans Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Koninklijke Heijmans's revenue will grow by 4.8% annually over the next 3 years.
- Analysts assume that profit margins will increase from 4.2% today to 5.9% in 3 years time.
- Analysts expect earnings to reach €182.0 million (and earnings per share of €6.39) by about August 2028, up from €112.0 million today.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 14.0x on those 2028 earnings, down from 15.1x today. This future PE is lower than the current PE for the GB Construction industry at 14.5x.
- Analysts expect the number of shares outstanding to grow by 3.09% per year for the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 6.37%, as per the Simply Wall St company report.
Koninklijke Heijmans Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- Persistent political uncertainty in the Netherlands, including frequent caretaker governments and delayed policy decisions, is hindering structural solutions to the national housing crisis and infrastructure renewal-this creates significant visibility risks for new project approvals and long-term revenue growth.
- Ongoing regulatory unpredictability and changing government requirements (such as rental market changes and arbitrary construction regulations) discourage both private and social housing investments, threatening to drive away institutional investors and reducing future demand, thereby impacting revenue and margin stability.
- Capacity constraints in urban and suburban planning, slow permit processes, and the unresolved nitrogen emission issue are materially delaying residential project initiations; this continues to limit the company's ability to capture high backlog conversion into sales, negatively affecting revenue momentum.
- Tight labor markets and an aging workforce, combined with a slow transition from traditional to industrialized and modular construction, constrain Heijmans' operational scalability; if modernization and automation initiatives face delays or do not scale by 2027–2028 as expected, this will restrict margin expansion and suppress earnings growth.
- Increased consolidation and heightened competition from both domestic and foreign construction companies, coupled with Heijmans' high exposure to the Dutch market, increase the risk of price pressure and order book volatility, potentially reducing market share, curtailing revenues, and compressing net margins.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of €70.375 for Koninklijke Heijmans based on their expectations of its future earnings growth, profit margins and other risk factors.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €3.1 billion, earnings will come to €182.0 million, and it would be trading on a PE ratio of 14.0x, assuming you use a discount rate of 6.4%.
- Given the current share price of €61.55, the analyst price target of €70.38 is 12.5% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.