Flattening revenues AND bulky valuation

Q2 largely inline with pre-announcement. Q2 was the peak for growth, H2 revenues flattening out. At 71x P/E Ambu needs time to grow into its bulky valuation.

Ambu (Buy, TP: DKK138.00) - Guidance still looks conservative

Having pre-released Q2 headline numbers and increased the 2024 guidance in mid-April, today’s detailed results provided few surprises. However, the important Endoscopy sales were slightly better than expected, and we find today’s guidance for >15% organic growth YOY (previously c15%) for that part of company still conservative, with potential for a further rise with the Q3 results. We reiterate our BUY and have increased our target price to DKK138 (130).

Weekly Real Estate Matrix

Performance and valuation data for Nordic real estate stocks as of 10 May 2024.

Weak quarter, sound outlook

Messy quarter, negative est. changes. Asset rotation set to continue. Several reasons to buy the share; BUY, TP SEK 155

Swedish policy rate cut, an upgrade and a downgrade

Sweden’s Riksbank cut the policy rate this week to 3.75% (4.0%); our estimates are based on another four cuts by end-2025. During the week we upgraded Veidekke to BUY, downgraded Castellum to HOLD, and reiterated our HOLD on Kojamo and SELL on Hufvudstaden and Sagax. The average implied EBITDA yields on the stocks we cover are 4.40% for 2024e and 4.79% for 2025e.

Hufvudstaden (Sell, TP: SEK115.00) - Vacancies on the rise

The Q1 results provided the market with no relief for its concern about the Stockholm office and retail rental market strength, as the company missed on revenues and saw an increased vacancy rate. We have cut our EPS by 5–6% for 2023–2026 and our target price to SEK115 (120), and reiterate our SELL.

Clear increase in vacancies

Castellum AB: 2 directors

A director at Castellum AB bought 3,633 shares at 126.950SEK and the significance rating of the trade was 42/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly ...

Weekly Real Estate Matrix

Performance and valuation data for Nordic real estate stocks as of 3 May 2024.

Castellum (Hold, TP: SEK135.00) - Unconvincing Q1 results

We have downgraded to HOLD (BUY) and trimmed our target price to SEK135 (136) following rather soft Q1 results that showed a risk in vacancy adding concern about the rental market outlook. We consider the stock fully valued, given only an 10% NAV discount (adjusted for Entra at market value) and its soft FFOPS growth outlook.

Q1 reporting continues

This week, Castellum and Balder reported Q1 results, Wihlborgs announced a new lease, and SBB corrected 2023 profits and dissolved Unobo. Norges Bank has signalled interest rates might stay higher for longer. K2A has halted preference dividend payments. The weighted-average implied EBITDA yields on the stocks we cover are 4.69% for 2024e and 4.97% for 2025e.

ALK-Abello (Buy, TP: DKK165.00) - European tablet growth shifts gear

Last night, ahead of time, ALK-Abello published its Q1 results and increased its FY top-line guidance on much stronger than expected European tablet sales growth of c28% (consensus c15%). At the same time, the company announced a cost-cutting programme in connection with its ongoing strategic review, which should help it reach its c25% EBIT margin target by 2025. We reiterate our BUY and have raised our target price to DKK165 (145).

Stockholm continue to stand out

Lowering its sights

Taking down its ambitions with new targets although we appreciate the lowered pay-out ratio. Higher probability of a DPS already for 2024.

Weekly Real Estate Matrix

Performance and valuation data for Nordic real estate stocks as of 26 April 2024.

Q1 reporting season kicks off

Q1 reporting season kicked off this week, with results from Nyfosa, Entra, Wallenstam, Fabege, KMC Properties, Pandox, and Catena. In other news, Public Property Invest is to be listed on the Oslo stock exchange on 29 April. The weighted-average implied EBITDA yields on the stocks we cover are 4.75% for 2024e and 5.04% for 2025e.

ALK-Abello (Buy, TP: DKK145.00) - Set for still-strong European tablet...

We expect another strong quarter for European tablet sales in Q1, up c15% YOY, marking a third consecutive quarter with growth in the teens, which should help boost investor confidence (results due at 07:00 CET on 3 May). However, due to tough comparables for the legacy business and seasonality patterns, we expect the 2024 guidance to be maintained. We reiterate our BUY and have raised our target price to DKK145 (140).

EPBD the big story this week

The Energy Performance of Buildings Directive (EPBD) was approved on 12 April, requiring the modernisation of existing real estate in the EU, and will soon enter the Official Journal of the EU. In other news, KMC Properties bought a new asset and appointed an interim CEO, JM got a new CEO, while Castellum announced a divestment and new leases, and Atrium Ljungberg kicked off Q1 reporting season. The weighted-average implied EBITDA yields on the stocks we cover are 4.74% for 2024e and 5.01% for 2...

Fully valued near-term

We maintain a neutral sector stance, but see near-term setbacks and consider risks tilted to the downside near-term due to strong sector performance in the past month, while market interest rates have risen. We expect two years of zero NAV growth, on average, due to yield expansion, and the sector theme to be deleveraging, with limited capex. We see few potential company-specific catalysts, leaving share prices largely driven by macro factors. We consider the sector fully valued near-term, at an...

Vacancy uptick in Stockholm

This week, Citymark announced vacancies in the Stockholm office market are now higher than during the 2007–2008 financial crisis. Selvaag Bolig (SELL, TP NOK25) released KPIs for Q1, where unsold inventory was at an all-time high. Norwegian house prices rose 0.9% in March and 5.9% YTD. Entra announced leases. Corem announced that it aims to issue bonds. The weighted-average implied EBITDA yields on the stocks we cover are 4.62% for 2024e and 4.88% for 2025e.