Wallenstam (Sell, TP: SEK45.00) - PFPM beat by strong NOI margin
The Q2 results were somewhat better than expected, as the company beat consensus on PFPM by 6% and us by 3% due to lower property costs giving a strong NOI margin. It also announced a restart of its buyback programme while the stock is trading at only a 7% discount to the last reported NAV. We reiterate our SELL due to the rich P/FFO valuation of 28x on our 2025e combined with the more muted project gains outlook versus historically. We have raised our FFOPS by 5% and our target price to SEK45 (40).Wallenstam Byggn is a property company that builds, develops and administers properties for sustainable living and the pursuit of business in Stockholm and Gothenburg. Co. is also a producer and supplier of renewable energy through its subsidiary, Svensk NaturEnergi (NaturEnergi). Operations were run in three business areas - properties in the Gothenburg and Stockholm regions and renewable energy through NaturEnergi. The two property regions also include responsibility for leasing and management of housing and commercial premises together with planning and construction work. Operations at NaturEnergi consist of both the generation of, and trade in, renewable energy.
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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