Castellum (Hold, TP: SEK145.00) - Mixed Q2
We reiterate our HOLD, but have raised our target price to SEK145 (135) as we have lowered our financial cost estimate and raised our JV earnings forecast (Entra). Rental market KPIs were neutral in our view (not as strong as for some peers in Q2), and we expect the market to continue to focus on rental market strength, as we now, following market interest rate expectations, are less concerned about the ICR. We expect Castellum to remain cautious near-term on investment. A potential near-term catalyst could be if Castellum could issue a EUR bond at attractive terms. We consider the stock fairly valued, given an 11% NAV discount and a 14x P/FFO 2025e.Castellum operates as a real estate company in Sweden. Co.'s real estate portfolio is located in five regions: Greater Gothenburg, Oresund Region, Greater Stockholm, Malardalen and Eastern Gotaland. At Dec 31 2013 Co.'s real estate portfolio comprised 626 properties, of which 324 were office/retail properties, 263 were warehouse/industrial properties, 16 were for project, and 23 were undeveloped land.
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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