Fabege (Hold, TP: SEK87.00) - Expectations remain low
The Q4 results did not change our view that the weak office rental market in Stockholm is set to persist at least through 2025. We consider this well reflected, with Fabege trading at a 43% discount to its last reported NAV. We forecast a low average funding rate of 2.6–2.8% in 2025–2026e; however, the P/FFO of 19.5–18.3x screens unattractively, especially as renovation capex could trend higher to just retain tenants in a weak rental market. We reiterate our HOLD and SEK87 target price.
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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