Wallenstam (Sell, TP: SEK110.00) - Results in line, valuation still high
Wallenstam’s Q4 results were solid and fairly in line with consensus. We continue to expect the downturn in apartment starts (rolling 12-month figure has trended down for six consecutive quarters) to lead to lower development gains in 2021–2022e. At a sector-high (in our universe) 2021e P/FFO of 33x and a 27% NAV (NRV) premium, we believe the share price reflects an overly optimistic view on future development gains. We reiterate our SELL and our SEK110 target price.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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