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Peab (OM:PEAB B) Lands School Contract Following Fresh Questions Around Fair Value

Simply Wall St · 1d ago

Peab (OM:PEAB B) has secured a SEK 127 million contract to plan and build a new grades 7 to 9 school in Bollebygd, adding a fresh public sector project to its Construction order book.

See our latest analysis for Peab.

At a share price of SEK95.75, Peab has delivered a 10.89% year to date share price return, while the 1 year total shareholder return of 32.55% and 3 year total shareholder return of 137.77% indicate momentum that investors are still watching closely.

If you are weighing this construction contract against opportunities elsewhere, it could be a good moment to broaden your search with our screener of 115 top founder-led companies

Peab now trades at a meaningful discount to both analyst targets and an estimated fair value, even after the strong multi year share price run. Is the market rightly cautious, or is it underpricing what investors already see?

Price to Earnings of 12.9x: Is it justified?

On a P/E of 12.9x at SEK95.75, Peab screens as good value compared with both its peers and estimates of what its earnings multiple could support.

The P/E ratio compares the current share price with earnings per share. For a construction and civil engineering group like Peab, it is a quick snapshot of how much investors are paying for each unit of current earnings.

Peab is described as trading at good value compared to peers and the wider European Construction industry, with its 12.9x P/E below the peer average of 19.7x and below the industry average of 15.5x. Against an estimated fair P/E of 20x, this is a wide gap. The market is valuing the company at a clear discount to both similar companies and the level that regression analysis suggests the P/E could move toward if its profile aligned with that fair ratio.

Explore the SWS fair ratio for Peab

Result: Price-to-earnings of 12.9x (UNDERVALUED)

However, Peab still faces risks if construction demand softens or if project costs rise, which could pressure margins and challenge the current valuation narrative.

Find out about the key risks to this Peab narrative.

Another View on Peab using our DCF model

The SWS DCF model tells a different story for Peab. At SEK95.75, the stock is compared with an estimated future cash flow value of SEK168, which points to a materially undervalued picture. That is a large gap that investors may wish to consider carefully.

Look into how the SWS DCF model arrives at its fair value.

PEAB B Discounted Cash Flow as at Aug 2026
PEAB B Discounted Cash Flow as at Aug 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Peab for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 273 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

Given the mix of potential upside and clear risks around Peab, it makes sense to look through the data yourself and decide where you stand. If you want a balanced view that highlights both concerns and positives, start with these 4 key rewards and 2 important warning signs.

Looking for more investment ideas beyond Peab?

If Peab has your attention, do not stop here. Use the Simply Wall Street Screener to source fresh stock ideas that fit the way you like to invest.

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.