Report
Simen Mortensen

Balder (Hold, TP: SEK230.00) - Cycle set to turn in two years

While falling interest rates, lower yields and strong NAV growth have been catalysts for rising asset values, FFO growth and new investments, we are concerned the cycle will start to turn, with interest rates set to rise. We see two more years of FFO growth before the trend reverses, implying a risk to low yield valuations. We therefore reiterate our HOLD recommendation, while we have raised our target price to SEK230 (200) on the updated EPRA NAV. Overall, the Q1 results were in line with our forecasts.
Underlying
Fastighets AB Balder Class B

Fastighets AB Balder is a Sweden-based company engaged in the acquisition, development and management of residential and commercial real estate. The Company's real estate portfolio is comprised primarily of residential real estate and is located in such cities, as Stockholm, Gothenburg, Lund, Malmo, Norrkoping, as well as in regions outside metropolitan areas of Sweden and in the Copenhagen region in Denmark. The Company's subsidiaries include Balder Storstad AB, Balder Mellanstad AB, Din Bostad Sverige AB, Egby Vindkraftverk AB and Serena Properties AB.

Provider
DnB Markets
DnB Markets

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.

 

Analysts
Simen Mortensen

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