Citycon (Hold, TP: EUR6.70) - FX headwinds
The weakening NOK resulted in Q1 rental income, EBIT and FFO/share missing our estimates and consensus. Net debt edged up (+2% QOQ) rather than tracking FX trends in the P&L, creating an unfavourable FX mix and prompting us to cut our 2023–2025e adj. EPS. We now expect 2023 FFO/share (EPRA adj. EPS) to be at the lower end of the unchanged guidance. We reiterate our HOLD but have cut our target price to EUR6.7 (7.1) to reflect our estimate changes.Citycon is an active owner, operator and developer of shopping centers. Co. aims to increase its net yield from shopping centers over the long term through active retail property management and systematic redevelopment efforts. Co. is involved in the day-to-day operations of its shopping centers. As of Dec. 31, 2011, Co. owned a total of 36 shoppings centers: 23 in Finland, 9 in Sweden, 3 in Estonia, and one in Lithuania. Co. also owns 43 other retail properties: 36 in Finland and 7 in Sweden and one undeveloped lot in Finland. Co. manages two commercial shopping centers in Finland.
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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