Fabege (Buy, TP: SEK140.00) - Expect fewer developments ahead
We have lowered our target price to SEK140 (181) to reflect weaker Swedish GDP and updated peer valuations, and have updated our model for our expectations of: 1) falling LFL rental growth in 2020–2021; 2) a rising vacancy level; and 3) the company not meeting its annual investment volume target in 2020–2021. We reiterate our BUY, but as we see Fabege as more cyclical than peers due to its large development portfolio, it is no longer our Swedish top sector pick.
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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