Castellum (Sell, TP: SEK130.00) - Valuation above the norm
Castellum reported operating figures for Q4 broadly in line with our and consensus forecasts. While we remain concerned about upcoming tax law changes long-term, a P/FFO premium of 16.6% above the norm is the reason we reiterate SELL. We have updated our forecast for the proposed reduced corporate tax of 20% (22%). We also include the suggested 25% EBITDA interest rate cap, but effects for 2018–2020 are limited given current market interest rates. We have raised our target price to SEK130 (126) on updated estimates.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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