Olav Thon (Buy, TP: NOK220.00) - Prime assets, lower valuations
Higher yield requirements in Q1 due to Covid-19-related retail uncertainty lowered Olav Thon’s asset values by 3.9% QOQ. EBIT missed our forecast due to a NOK65m rent-loss provision. Despite Olav Thon’s assets being higher-quality than most Nordic retail peers, its own NAVs are more conservative (retail yield 5.6%), and the stock is trading at a lower P/NAV. We reiterate our BUY, but have lowered our target price to NOK220 (230) on updated forecasts.Olav Thon Eiendomsselskap is engaged as a property operator. Co.'s property portfolio is broken down into the following property segments: shopping centres and commercial property. At Dec 31 2013, Co.'s shopping centres comprised the management of 87 shopping centres, of which 27 are managed for external owners.
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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