Balder (Hold, TP: SEK650.00) - Value gains accelerated
The Q3 results were solid, with earnings before value changes boosted SEK267m of financial investment gains. This led to a 19% consensus beat, but, adjusted for this one-off, earnings were 6% above our forecast and 2% above consensus. We find the valuation stretched but given an interesting segment mix, potential in developments and a strong track record of M&A-driven growth, the 22x 2022e P/FFO and 60% premium over the last reported EPRA NRV seem fair. We reiterate our HOLD and have raised our target price to SEK650 (600).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.
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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