Lundbergs (Sell, TP: SEK370.00) - Record NAV premium overlooking uncertainties
We have cut our target price to SEK370 (400) and downgraded Lundbergs to SELL (HOLD) on: 1) our view of a stretched valuation, trading at a 29% premium to reported NAV, which our NAV forecast no longer offsets after the recent rally; and 2) closing the gap with the OMXS Real Estate index suggesting 20%+ downside potential in the shares. To date, the stock has fended off potential Covid-19-related challenges, and while we like the portfolio’s defensive characteristics, our updated portfolio view means we now have a target NAV/share of SEK367, to which we apply a 0% discount target (in line with its 5-year average).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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