Lundbergs (Sell, TP: SEK390.00) - Sombre view contrasts with recent gains
Lundbergs’ 13% premium to reported NAV is demanding but not alarming in our view, suggesting a stub value of its unlisted real estate operations corresponding to a 2020e P/NAV of 1.4x (versus peers at 1.1–1.4x). Still, we have a negative view on a third of its portfolio, and forecast only 1% NAV growth in the next 12 months, as well as expecting the NAV valuation to gradually normalise. Also, closing the gap with the OMXS Real Estate index suggests 20%+ downside potential. Thus, we reiterate our SELL with a new target price SEK390 (370).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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