A Closer Look at Skanska (OM:SKA B) Valuation Following New Contracts and Strong Q3 Performance

Skanska (OM:SKA B) has been making headlines after landing major new contracts in Finland and the US. The company also reported a solid third quarter, marked by rising net income and continued sales growth.

See our latest analysis for Skanska.

Between headline-grabbing contract wins in Finland and the US and a robust earnings report, Skanska has caught the market’s eye, as reflected in its 1.9% year-to-date share price return and a 14.8% total shareholder return over the past year. While momentum has ebbed slightly in recent weeks, the company’s three-year total return of nearly 55% highlights solid long-term growth for investors.

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With Skanska’s strong operational momentum and new project wins, the key question for investors now is whether the current share price still offers value or if the market has already factored in all this growth.

Most Popular Narrative: 12.1% Undervalued

Skanska’s current share price of SEK241.7 sits well below the narrative’s fair value estimate, suggesting there is potential upside if the story plays out as expected. The valuation relies on projected improvements to profitability, momentum in order intake, and greater emphasis on sustainability-focused projects, all of which could shift the company’s earnings trajectory.

Skanska's record-high order backlog (19 months of production, SEK 268 billion) and strong book-to-bill ratios (>100% across all geographies) position the company to benefit from sustained government infrastructure spending, especially in the US and Europe, supporting future revenue growth. The company is seeing robust demand and improved outlooks in key markets (Swedish civil, Central European residential), which are driven by continued urbanization, population growth, and increased public investments in defense, energy, and water infrastructure. This lays the groundwork for mid- and long-term earnings expansion.

Read the complete narrative.

Curious how this narrative arrives at a premium price target? It all comes down to optimistic growth bets, margin upgrades, and a belief that Skanska’s project pipeline could deliver above-market profitability. Want the full story behind these forward-looking projections? There is more to uncover. See how the numbers stack up.

Result: Fair Value of $275 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weakness in Nordic property markets or higher restructuring costs could easily challenge these optimistic long-term forecasts for Skanska.

Find out about the key risks to this Skanska narrative.

Build Your Own Skanska Narrative

Not convinced by the prevailing story, or want to dive into the numbers first-hand? You can craft your own perspective in just a few minutes. Do it your way.

A great starting point for your Skanska research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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