In this equity research report, analyst Carl-Fredrik Ekström analyzes Sweco AB, a leading European engineering and architecture consultancy. The company plays a central role in Europe’s energy transition, driven by large-scale investments in power grids, renewable integration, and sustainable infrastructure. Despite a record-high order backlog and a strong position in policy-backed markets, Sweco’s shares trade at a discount to peers.

Through a blended DCF and peer valuation, a target price of SEK 198 is implied, indicating a potential upside of approximately 30% from the current trading level of SEK 152.6.

Investment Thesis

• Structural Energy Transformation Undervalued by the Market: Sweco benefits directly from Europe’s accelerating investments in grid modernization and electrification. EU-driven policy frameworks ensure multi-year visibility and stable demand.

• Digitalization and AI-Driven Efficiency: Sweco’s use of digital twins and AI-based design tools supports scalable consulting margins, with EBITA expected to improve from 8.3% in 2024A to 9.5% in 2028E.

• Defensive Growth Profile: Around 60% of revenues are derived from public-sector clients, providing recession-resilient cash flows and a lower risk profile relative to peers.