Dom Development: fairly valued, after a rally (downgraded to HOLD)
After a fantastic run, we are downgrading Dom Development (Dom) to HOLD on valuation grounds, and set our new 12M PT at PLN 251/share. With its strong balance sheet and consistent dividend payouts, Dom has been one of the best performers on the Warsaw Stock Exchange (WSE), generating a c.26% total average annual return over the past ten years. We continue to see it as the leading home builder in Poland, and one of the safest long-term ways to play the sector, and believe it should remain a portfolio staple for local funds. We expect its results to benefit from the ongoing rate easing cycle and, combined with stable prices (so far) for construction materials, this could bode well for continued margin strength. After a record 2024, 2025E could be even stronger, in our view, in both the number of units sold and the P&L result. That said, we believe the short-term upside could be limited from current valuation levels.Dom Development is engaged in the construction and sale of residential real estate in Poland.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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