Lundbergs (Hold, TP: SEK455.00) - Stability at fair value
We have upgraded Lundbergs to HOLD (SELL) with a SEK455 (390) target price. Our updated portfolio view yields 7% growth for 12-month forward NAV. The NAV valuation has gradually normalised and we find its 5% premium to reported NAV undemanding (2% discount to our NAV). Meanwhile, we believe the defensive value characteristics of its portfolio should offer downside protection. Should it close the gap with the OMXS Real Estate index (98% correlation in the past 15 years), we see only a <5% downside potential versus 20%+ in our most recent review.L E Lundbergforetagen AB is an investment company that manages and develops a number of companies. The asset portfolio includes the wholly owned real estate company, Fastighets AB L E Lundberg, the publicly traded subsidiaries, Hufvudstaden and Holmen and the associated companies, Indutrade and Husqvarna. Co. also has major shareholdings in Industrivarden, Handelsbanken, Sandvik and Skanska. Co.'s subsidiary, L E Lundberg Kapitalforvaltning, is engages in securities trading. Operations consist of real estate operations, the manufacture and sale of printing paper, paperboard and sawn timber products, forest and power operations, and equity management (including securities trading).
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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