Wihlborgs (Buy, TP: SEK75.00) - Strong cash flow and bank funding
The Q3 results were overall solid, but we consider the rising property costs and fairly low letting activity worth monitoring. We reiterate our BUY but have cut our target price to SEK75 (85) on a tweaked valuation yield. Despite its relatively high interest-rate sensitivity, with c50% unhedged interest-bearing debt, we forecast flat FFOPS in 2022–2024 but find the 11.5x P/FFO attractive given the limited financial risk (2023e NIBD/EBIT of 10x).Wihlborgs Fastigheter is a property company that focuses on commercial properties in the Oresund region. Co.'s property portfolio is located in Malmo, Helsingborg, Lund and Copenhagen. At Dec 31 2013, the property portfolio consisted of 264 properties, including 12 with site leasehold rights, with a total lettable area of around 1.5 million square meters.
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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