Balder (Hold, TP: SEK83.00) - FCF finally positive on R12-basis
A solid Q2 included positive FCF and a 4% drop in NIBD QOQ (ending 1% below our forecast). Sato’s improved vacancy rate QOQ was a positive, but risks in Finland’s residential market remain. We have raised our 2025–2026e FFOps by 6–10% on falling market interest rate expectations, and our target price to SEK83 (70). However, after a strong share-price performance and muted investment capacity expectations, we consider the stock fully valued at a 3% discount to the last reported NAV (and a 2025e P/FFO of 15x), and reiterate our HOLD.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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