Fabege (Sell, TP: SEK141.00) - High P/FFO and P/NAV
Q2 results were broadly in line with consensus, and marginally above our forecasts due to property costs lower than we estimated. Asset values increased 2.6% Q/Q, largely driven by lower yields, but also strong figures from projects and solid market rents. Management said that yields should fall a further 20bp, based on recent transactions. While we have raised our target price to SEK141 (138), well above Q2 EPRA NNAV of SEK128/share, we see potential downside due to the demanding valuation, hence we reiterate our SELL.
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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