Fabege (Hold, TP: SEK112.00) - High valuation limits upside potential
With yields down 6bp in Q2, to 4.18%, Fabege booked another massive unrealised value gain; the EPRA NAV was SEK116/share. The operational Q2 figures were in line with our forecasts. With low yields, we expect the effects of higher interest rates in a few years to offer significant potential NAV risk, and with limited P/FFO support we find the valuation a potential risk, but no near-term catalysts for a de-rating. We repeat HOLD and have raised our target price to SEK112 (92.5).
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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