Fabege (Buy, TP: SEK120.00) - Vacancy rate a concern, but shares down too far
We believe market concerns about a structural office downsizing trend after Covid-19, and the potential impact on market rent, could hang over the development-heavy stock for a long time. However, we see long-term deep value in its assets and believe a too-large market rent decline is priced in given the share price hit since the Q2 results. We reiterate our BUY but have cut our target price to SEK120 (135) on a larger risk premium in our valuation and expectations of lower development profits in the coming years.
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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