Olav Thon (Buy, TP: NOK240.00) - Better equipped than the rest
Management presented a ‘worst-case’ scenario including a 100bp valuation yield expansion from Q3’s 4.9%, while this is part of our base case for 2024e. However, even at a 5.9% yield, our 2024e LTV is a comfortable 33% (34% in Q3). Unlike several of its Nordic peers, Olav Thon has a very strong balance sheet, and we believe this should allow it to pursue real estate transaction opportunities when they arise in the coming years. Based on higher interest rates and the Q3 report, we have made minor 2022–2024 forecast changes. We reiterate our BUY and NOK240.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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