reports
- Niklas Wetterling
Wihlborgs (Buy, TP: SEK100.00) - Back up to BUY ahead of Q1
We have upgraded Wihlborgs to BUY (HOLD) and raised our target price to SEK100 (90). We no longer see a near-term risk to the stock from material asset write-downs, but rather expect investors to focus on healthy momentum in lettings at Wihlborgs. With a positive outlook for Q1, we forecast strong net lettings, and are 3% above Infront consensus on profit from property management (PFPM). The results are due at 07:30 CET on 23 April.
- Niklas Wetterling
Atrium Ljungberg (Hold, TP: SEK200.00) - Cost control behind PFPM beat
Strong cost control and an energy-cost tailwind gave a 5% PFPM beat, while the uptick in vacancy rate and negative net letting (second consecutive quarter) were key negatives. We have cut our 2025–2026e EPS by 2–3%, mainly on market interest-rate changes. We reiterate our HOLD and have lowered our target price to SEK200 (220) on a tweaked valuation yield. Benefiting from a strong hedging portfolio in 2023 (FFOPS +16% YOY, among the best in the sector), we expect muted FFOPS growth in our forecas...
- Niklas Wetterling
SBB Norden (No_rec, TP: SEK) - Mixed Q4, more funding needed
We found the Q4 results mixed, with numerous one-offs, and SBB lowered its earnings capacity guidance by 9% QOQ. In our view, additional funding is needed to improve liquidity and strengthen its balance sheet, where we expect Sveafastigheter to play an important part. We have no recommendation or target price.
- Niklas Wetterling
Sagax (Sell, TP: SEK230.00) - Growth set to slow in H2 2024
The Q4 results were solid, with a 4% EBIT beat versus Infront consensus. We still expect FFOPS growth to slow in our forecast period, and by H2 2024 to fall below double digits, which we see as a potential negative catalyst. With a 2024–2026e FFOPS CAGR of 8–10% in our M&A scenario, we reiterate our SELL and we have lowered our target price to SEK230 (240), based on a 2025e P/FFO of 18x (19x).
- Niklas Wetterling
Catena (Buy, TP: SEK500.00) - Optimistic outlook on project starts
We reiterate our BUY following the strong Q4 results, but have lowered our target price to SEK500 (510) as we cut our 2024–2025e EPS by 3% due to higher interest rates. We liked management’s optimistic comments on near-term potential new development deals and the zoning plan progress, which drove the NAV growth of 6.6% in Q4. The stock is trading at a 2024–2025e P/FFO of 19–17x (or 14–13x adjusted for earnings from our recurring development gain).
- Niklas Wetterling
Nyfosa (Buy, TP: SEK91.00) - Q4 better than market’s reaction
We reiterate our BUY following the solid Q4 results and have increased our target price to SEK91 (87) after raising our 2024–2025e EPS by 2% on our higher JV earnings forecasts. Furthermore, we like the net lettings and improved vacancy rate in Q4. We still like Nyfosa ahead of the first rate cut given its high interest rate sensitivity and somewhat higher financial gearing than most peers – despite somewhat less upside potential than previously. The stock is trading at a 2024–2025e P/FFO of c15...
- Niklas Wetterling
Corem (Hold, TP: SEK9.50) - Salesman of the year, 2023
We consider Q4 soft as: 1) NAV dropped 14% QOQ; 2) DPS have been cut; and 3) the vacancy rate rose to 13%. However, by divesting SEK14bn of assets in a tough market in 2023, Corem has cut its NIBD by an impressive 29% YOY, and also lowered its refinancing risk following a SEK1.1bn bond issue in Q1 at attractive terms. The stock is trading at a 49% discount to last reported NAV, but we fear the market will overlook this until the rapidly falling NAVPS (-33% YOY) stabilises. We reiterate our HOLD ...
- Niklas Wetterling
Aros Bostad (Hold, TP: SEK28.00) - Solid end to 2023
We find the Q4 results solid, with a strong POC-based EBIT margin of 11%, and EPS adj. in line with our forecast, but an IFRS-based EPS beat at SEK0.7 (we forecast SEK-0.1) due to a timing effect (more Q4 unit completions than we expected). We reiterate our HOLD but cut our target price to SEK28 (30), awaiting more clarity on the potential merger with Besqab as well as signs of an improved end-market.
- Niklas Wetterling
Hufvudstaden (Sell, TP: SEK120.00) - Flat occupancy, but soft NOI marg...
Our concerns about the weakening Stockholm city rental market did not play out in Q4, as the vacancy rate was flat QOQ and management gave optimistic guidance of a falling vacancy rate near-term. However, we have cut our 2024–2025e EPS by 3–4% due to the NOI margin miss. We remain sceptical about the strength of the rental market and therefore reiterate our SELL and have cut our target price to SEK120 (125).
- Niklas Wetterling
Castellum (Buy, TP: SEK136.00) - Soft Q4
Lacklustre Q4 results included: 1) more asset write-downs than peers; 2) weak net lettings; and 3) management’s somewhat soft comments on rental markets. We have cut our 2024-2025e EPS by 2%, and cut our target price to SEK136 (150) after adjusting our risk premium following the soft Q4 results. However, we still consider the stock attractively valued at a P/FFO of 13x, and reiterate our BUY.
- Niklas Wetterling
Wihlborgs (Hold, TP: SEK90.00) - Miss on PFPM, DPS streak rolling
Key positives in the report were its raised DPS, which makes Wihlborgs stand out versus most peers, and there were asset value write-downs of only -0.5% in Q4 (or -2.3% since peak book values), which surprised us. Furthermore, its net-letting were once again solid at +SEK18m. However, the market focused on the 8% miss on PFPM. We forecast a flat FFOPS in 2024, and a 9% increase in 2025. We consider the stock fairly valued, trading at only a 5% discount to last reported NAV. We reiterate our HOLD...
- Niklas Wetterling
Balder (Hold, TP: SEK67.00) - A market interest rate case
We reiterate our HOLD and SEK67 target price, following neutral Q4 results. Balder’s status quo seems likely to continue for the next 1–2 years, focusing on deleveraging and few transactions or projects, based on the conference call. We see few company-specific potential catalysts and expect the share price to be largely driven by market interest rate changes.
- Niklas Wetterling
Wallenstam (Sell, TP: SEK40.00) - Asset values remain high
Q4 highlights were the slightly improved vacancy (5% vacancy in Gothenburg non-residential assets). The key negatives were: 1) 7% miss on PFPM versus consensus due to higher costs; 2) a DPS cut by 17% YOY; and 3) surprisingly no asset value write-downs based on its internal valuation method – its average residential yield is 3.5%, which seems elevated to us. We consider the stock valuation demanding on cash earnings, and given the soft outlook for development gains, we reiterate our SELL and hav...
- Niklas Wetterling
Fabege (Hold, TP: SEK100.00) - Solid Q4, soft outlook comments
Q4 were solid and its large PFPM beat our forecast, helped by some one-offs. We have raised our 2024–2025e EPS by 4–7% mainly on updated interest costs. We reiterate our HOLD but have lowered our target price to SEK100 (110) on our adjusted valuation yield. We consider the market outlook comments soft and we see risk with capex remaining elevated, as Fabege has struggled with project profitability for the past two years.
- Niklas Wetterling
- Niklas Wetterling
Atrium Ljungberg (Hold, TP: SEK220.00) - Most FFO growth now behind us
The Q4 results were solid, while net lettings were somewhat soft. We have cut our 2024–2025e EPS by 2–5% and reiterate our HOLD but have lowered our target price to SEK220 (230). Having benefited from a strong interest hedge portfolio in 2023 (16% FFOPS growth YOY – among the best in the sector), we expect muted FFOPS growth of 0–1% for 2024–2025 as hedges gradually expire. Trading at a 2024e P/FFO of 19x, we consider the stock fairly valued.
- Niklas Wetterling
Wallenstam (Sell, TP: SEK45.00) - Valuation too rich
We reiterate our SELL but have raised our target price to SEK45 (33) as our estimates are highly sensitive to interest rate changes due to Wallenstam’s low-yielding assets, and we have raised our 2024–2025e FFOPS by 9–18%. However, we consider the valuation rich, as the stock is trading at a 2024e P/FFO of 28x, and we see soft FFOPS growth and a weak value creation outlook for its residential development business in our forecast period.
- Niklas Wetterling
SBB Norden (Hold, TP: SEK4.50) - Falling rates could help divestment
We reiterate our HOLD but have raised our target price to SEK4.5 (3.1), as we have increased our 2024–2025e FFOPS by 5–17% on falling market interest rates. We expect declining rates to improve the transaction market in 2024, allowing SBB to continue deleveraging and reduce near-term refinancing risks, but forecast high share price volatility throughout 2024.
- Niklas Wetterling
Balder (Hold, TP: SEK67.00) - Long-awaited bond market rebound
Falling market interest rates and positive indications in the bond market have reduced refinance risks and fuelled a strong share-price performance for Balder in Q4. We consider the stock fairly valued and reiterate our HOLD ahead of the Q4 results, but after increasing our 2024–2025e FFOPS by 6–10%, we have raised our target price to SEK67 (48) on lower refinance risk. We believe focus in our forecast horizon will be on deleveraging, translating into muted growth in 2024–2025e.
- Niklas Wetterling
Corem (Hold, TP: SEK10.00) - Falling rates easing pressure on ICR
We reiterate our HOLD but have raised our target price to SEK10 (8.0), as falling interest rates have eased the pressure on the ICR covenant. We have increased our 2024–2025e FFOPS from SEK0.32–0.27 to SEK0.62–0.69. If Corem does not secure new funding, we calculate that it would lack the cSEK8bn needed to cover bond maturities and capex until end-2025e.
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