Shares in Swedish construction group Peab AB surged on Thursday, climbing over 8% in Stockholm trading and lifting related exchange-traded funds and ADRs on the London Stock Exchange. The rally followed the release of second-quarter results that comfortably exceeded market expectations, prompting the company to raise its full-year revenue forecast.
Peab reported operating profit of SEK 1.2 billion for the three months to June, a 22% increase year-on-year and well ahead of the SEK 1.04 billion consensus forecast. Revenue rose 12% to SEK 16.8 billion, driven by strong demand in infrastructure projects and a recovery in Swedish housing construction. The company now expects full-year revenue in the range of SEK 65–68 billion, up from a previous forecast of SEK 62–65 billion.
For UK investors, the move is significant because Peab is a bellwether for the Nordic construction sector and its ADRs are held by several UK-focused infrastructure funds. The positive read-across also lifted shares of UK-listed construction peers such as Balfour Beatty and Kier Group, both of which rose around 2% in afternoon trading. The FTSE 250, which has a heavy weighting of construction and materials stocks, gained 0.3% on the day.
Analysts were quick to upgrade their views. SEB raised its price target on Peab to SEK 95 from SEK 85, noting that margin improvement was broad-based across all segments. Danske Bank echoed the sentiment, highlighting that cost-control measures implemented in 2025 are now bearing fruit. 'Peab is demonstrating that it can grow profitably even in a still-challenging macroeconomic environment,' the bank said in a note.
The broader context for UK pension holders is that Peab's performance offers a window into the health of European infrastructure spending. With UK government commitments to major projects such as HS2 and the Lower Thames Crossing, a strong Nordic peer signals that construction margins may be improving across the region. However, investors should note that Peab's domestic market is Sweden, where interest rate cuts have begun to stimulate housing demand — a dynamic that is not yet mirrored in the UK.