UBM Development raised to BUY, TP EUR 39.0 - Increased pipeline, less hotel & more residential exposure
We upgrade UBM to BUY with a new TP of EUR 39.0 (from EUR 43.0) on the back of (1) a share price decline in recent months, (2) the shift in the project pipeline away from hotel development and (3) an increase in projects expected to be completed in the medium term. The new target price implies an upside of 32%. Residential development which encompasses 43% of the new pipeline continues to perform well despite the pandemic. This is the case especially in Austria and Germany, where most of the developments are located and should provide a solid earnings base. Additionally, new, high-quality office buildings could also start seeing demand driven by institutional investors looking for yield. Nevertheless, uncertainties in the office segment remain present, in our view.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.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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