Kungsleden (Buy, TP: SEK93.00) - Support from reinstated dividend
We are broadly in line with consensus for Q3 (results due at 07:00 CET on 21 October). We have raised our 2022e EPS by 2% on updated vacancy and LFL rental growth forecasts, and lowered our implied EBIT yield by 10bp in our valuation, while we keep our 10% NAV discount (in line with the historical average). We consider the stock attractively valued given a lower P/FFO than peers and reasonable leverage. We see reinstatement of the DPS for 2019 providing further support for the valuation. We reiterate our BUY and have raised our target price to SEK93 (83).Kungsleden is a property company based in Sweden. Co.'s property holdings consist of commercial premises in Greater Stockholm, Malardalen, southwest Sweden and growth towns in Norrland. The portfolio is segmented into Office, Industrial/warehouses, Retail and Other. Co.'s operating segments are properties, which manage and develop properties and provides premises for external customers; and Nordic Modular, which lets modular buildings in a corresponding way as traditional premises and also produces and sells modules to external customers. As of Dec 31 2013, Co. had 366 total properties, of which 139 were offices, 135 were industrial/warehouses, 68 were retail, and 24 were other properties.
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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