UBM Development confirmed at BUY, TP EUR 54.0 - Target price lifted
UBM Development delivered strong 3Q 2019 results and presented a first upbeat profit guidance for 2020 and 2021 amid higher output, percentage-of-completion sales and the fact that the majority of the projects for the two coming years are forward sold already. Following the successful issue of a new corporate bond with a coupon of 2.75% we have not changed our interest expense forecasts because we were forecasting such a refinancing measure already. Thus, we have kept our EPS projections unchanged over the next three years but lift our target price to EUR 54.0 (EUR 50.0) because we roll over of our valuation base year from 2019e to 2020e. Consequently, we reiterate our BUY rating given the share price upside offered, the ongoing positive earnings momentum, the improved project visibility and the attractive dividend yield.UBM Realitaetsentwicklung is engaged in the the development, utilization and management of real estate. Co.'s projects include: hotels; trade/entertainment; office blocks; logistics/commerce; urban development; residential buildings; revitalization; special projects; and garages/parking.
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