Atrium Ljungberg (Sell, TP: SEK158.00) - Risks undervalued
We have downgraded Atrium Ljungberg to SELL (HOLD), with the stock looking overvalued following the recent share price gain, now trading at a 2021e P/FFO of 20x versus peers on 17x. We do not believe the retail exposure, delays to new development starts or the risk of falling office market rents in Stockholm are fully reflected. We also expect a return of pandemic-related rent discounts in the next two quarters following the second wave of Covid-19. We have edged down our target price to SEK158 (160) after trimming our 2021–2022e EPS by 1%.Atrium Ljungberg is a property company. Co. owns, develops and manages properties and areas, primarily for the retail and office sectors. Co.'s operations are primarily located in Stockholm, Uppsala and Malmo. Co. develops areas and city districts in these three regions with a mixture of businesses. Most of Co.'s office portfolio is found in Stockholm: Sickla, Farsta, Sodermalm, Hagastaden and Kista. Co.'s residential properties are in the city district of Arvinge in Kista and the Mobilia area in Malmo. As of Dec 31 2013, Co.'s property portfolio includes a total of 47 properties.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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