Immobel Stomach Short-Term Pain To Pocket Long-Term Gains

Today we revisit the investment case of Immobel after having created a new financial model from scratch. We believe that the new model better captures management's guidance and closely mimics key aspects of Immobel's business namely Gross Development Value (GDV), portfolio rotation, debt, and inventories, while also incorporating our views and assumptions on the business. During FY22, Immobel's business significantly slowed down due to much lower demand for residential units, higher interest/mortgage rates, and higher construction prices. We believe that Immobel will find it difficult to sell residential units at the current pace as the Belgian residential demand may not yet have fully reacted to the higher mortgage rates. As a result, we believe that Immobel will, during FY23, book a top line closer to the lower limit (€270.0m) of their FY23 outlook (KBCSe: €285.0m). Our positive view on Immobel's experienced management and long-term potential convinces us of an ACCUMULATE rating but we lower our TP from €68.0 to €63.0.