SBB Norden (Sell, TP: SEK22.00) - Downside risk to consensus
We reinstate a recommendation on the SBB B-class shares with a SELL and SEK22 target price. We believe some investors – and even consensus – seem to misunderstand SBB’s multi-layer equity; while the D-class shares and hybrid bonds are part of equity under IFRS, in our opinion they have debt-like characteristics, in views of the B shares (or common shares). Regardless, consensus 2021 per-share estimates look bullish to us and the valuation rich, with the latter underestimating the long-term real estate risk even with SBB’s public sector-skewed tenant base.
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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