Fabege (Sell, TP: SEK120.00) - Good prospects, but overvalued
We forecast 27% growth in EBIT for 2018–2020, but only 14% in NIBD, and thus consider Fabege one of the best performers in the sector on NAV growth. With several new leases announced, we expect a solid Q3 net lease result, but are in line with consensus on operational Q3 results (due 08:0 CET on 18 October). We have raised our 2020 forecasts on started residential projects, and our financing forecasts. We see a solid growth story, but given the P/NAV premium and our concerns about slowly rising yields in the sector, we have downgraded to SELL (HOLD), despite raising our target price to SEK120 (112).
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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