Cofinimmo Refinancing the debt-to-assets ratio

We revisit our model after the successful ABB of EUR 167.0m. We account for the dilution of issuing shares at EUR 60.0, an approx. 40% discount to the previous NTA of EUR 101.6 per share. Additionally, we add further negative fair value corrections in FY24. This results in a 6.3% portfolio yield in FY24, a 50bps increase from the latest reported 5.8%. We believe the current stock price of EUR 59.0 has too much negativity priced in while the management is delivering well on its asset rotation strategy, debt maturities are well covered and the hedges keep the interest rate low. However, we remain cautious on the high dividend pay-out, continued high leverage even after the ABB and Brussel's health care portfolio.
Based on our updated DCF valuation, we repeat our ACCUMULATE rating at a EUR 76.0 target price.