Entra (Hold, TP: NOK220.00) - Binary risk/reward
Whether or not Castellum will counterbid for Entra has been the key question since Balder said it would make a mandatory bid. The Q3 results were in line with our forecasts. Spiking electricity prices have increased our expectation for the 2022 CPI adjustment of rents, and we have raised our revenue forecasts by 4.1% for 2022e and 3.2% for 2023e on this and our updated Q3 figures. We reiterate our NOK220 target price but have downgraded the stock to HOLD (BUY) on limited upside potential. However, should a bidding war break out, note that our bull-case fair value is NOK250.Entra ASA (Entra) is a Norway-based real estate company. It is engaged in development, letting and management of energy efficient buildings. Its portfolio comprises over 100 buildings with a total area of more than 1.3 million square meters and focus on office real estate in central locations. Entra is also engaged in project and land development activities. Its business is organized into four segments (regions) around Norway's four largest cities: Central Oslo, Greater Oslo, Southern and Western Norway, and Central and Northern Norway. Its strategic areas of concentration include Oslo and surroundings, Bergen, Stavanger and Trondheim. The Company is focused on the public sector, which represents approximately 80% of Entra's customers and tenants. Its legal structure comprises more than 40 property companies and special purpose vehicles (SPVs), a property management company Papirbredden Eiendom AS, several joint ventures and Oslo S Utvikling AS, a property development company.
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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