Catella (Buy, TP: SEK35.00) - Ready once the market turns
Low real estate transaction volumes continued to weigh on all segments in Q3. As interest rates peak and the real estate market eventually bottoms out, we expect a gradual re-rating of the stock. Trading at a 2024e EV/EBIT of 6x, we find Catella attractively valued given its long-term earnings prospects. We reiterate our BUY, but have cut our target price to SEK35 (37) having reduced our 2024–2025e EBIT by 2–11%. Q3 review. PTP was -SEK9m, weighed down by low variable revenues in all segments. Catella announced cost cuts (mainly staff) in Investment Management and Corporate Finance. Although there was little detail on the magnitude, the effect of these cuts should be seen in the next few quarters. Also, Q3 earnings did not include fees from the acquisition of Acquila Asset Management, which added 10% to AUM at the end of Q3.
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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