Jefferies cuts Skanska on 'inevitable' property valuation pressure

** Jefferies downgrades Swedish construction firm Skanska to "hold" from "buy", as rising bond yields pressure the commercial real estate market and threaten asset valuations

** The broker lowers its price target for the stock by 2.6% to SEK 297/shr, noting that against the current high interest rate backdrop "pressure on valuation feels inevitable"

** The brokerage adds that the company holds significant investments in US commercial real estate where a shrinking project pipeline and higher yields put valuations most at risk

** Jefferies cuts its earnings estimates by up to 9% to reflect reduced sales activity and applies a larger discount to the book value of the property division

** A strong construction backlog might offer valuation support, but the broker expects this will not fully offset the looming property weakness ahead of Q3 results

** The stock is down 3.7% at 07:07 GMT

** Out of ten analysts that cover the stock, five rate it "strong buy" or "buy", four rate "hold", and one rates "sell", according to LSEG data