Outlook for continued high rates

Although we continue to expect some margin headwind, the outlook for postponed rate cuts – leaving interest rates at continued high levels – should bode well for sector earnings, further supported by a strong profitability focus and modest loan losses. With the sector trading at an average 2026e P/E of c11.0x, and solid dividend potential, we find the valuation undemanding. We reiterate our positive sector view but highlight a larger share of HOLD recommendations than 12 months ago.

Everything is connected

Geopolitical uncertainty has affected market interest rates and thus the Nordic real estate sector – and we see no near-term fix. The yield gap (risk premium) has remained broadly unchanged in the recent market volatility, meaning interest rates changes explain most of the YTD share price performance – a correlation we expected will continue. The local office rental market remains soft, and we expect the logistics market to follow suit. However, given the deleveraging efforts in recent years and...

A tenant bankruptcy, a lost rating, more newbuilds and new issues

This week, Castellum lost its seventh-largest tenant after Northvolt declared bankruptcy, Citycon’s IG rating was withdrawn, construction companies continue to start newbuilds (NCC in Finland), Corem announced a lease extension, and Kojamo and Sagax issued new bonds. The weighted-average implied EBITDA yields on the stocks we cover are 5.17–5.49% for 2025–2026e.

Ambea (Buy, TP: SEK130.00) - Acquiring Validia Oy

Ambea’s acquisition of Validia Oy, entering the Finnish social care market, makes good sense to us. A post-integration valuation of c7.5x EV/EBITA and tacit ROIC of c13% suggest a solid deal, and consolidating Validia Oy implies 4–5% increases to our 2025–2027e adj. EPS. We see a strong case, with robust demand, solid FCF and financials giving room for share buybacks/dividends and further possible acquisitions. We reiterate our BUY and have raised our target price to SEK130 (123).

‘The times they are a-changin’

The recurring theme at our 18th Energy & Shipping Conference was geopolitical uncertainty and a potential trade war, warranting a wait-and-see approach, particularly on the Trump 2.0 effect. The consensus view pointed to high asset values, with no rush to the yards, aligning with below-NAV valuations across most of our coverage. However, panellists generally saw less downside risk than the 25% average discount to steel for our Tanker, Dry Bulk and Gas coverage. Overall, the day highlighted uncer...

Tough macro

Share prices for the names we cover are down by 7% week-on-week on average following the hike in market interest rates. In other news, February residential prices for Norway and Sweden were published, Skanska announced another large newbuild in Sweden, and Pandox acquired a EUR66m hotel in Cologne, Germany. The weighted-average implied EBITDA yields on the stocks we cover are 5.12% for 2025e and 5.43% for 2026e.

Better markets and more Q4 results

Positive data points for January were Colliers’ market update showing Nordic commercial real estate transaction volumes were up 17% YOY, while Norwegian residential developer, Union, said house sales improved 52% YOY, although both were from very low bases. Citycon released Q4 results this week, and Skanska announced a new development. The weighted-average implied EBITDA yields on the stocks we cover are 4.94% for 2025e and 5.24% for 2026e.

Citycon (Hold, TP: EUR3.50) - Still in deleveraging mode

Given its high financial leverage, Citycon stated it would continue to bolster its balance sheet in 2025–2026. Asset values declined again in Q4, with the EPRA NTA (NAV) down 11.4% QOQ. We have cut our 2025–2027e EPS (FFOPS), and expect 2025 EPS to be at the low end of the guidance, sliding further on divestments. We see few positives other than a low P/NAV, reiterate our HOLD, and have cut our target price to EUR3.5 (3.75) on lower NAV and EPS forecasts.

Last of the Q4s

Q4 reporting season wrapped up this week, with the last six of the names in the sector we cover releasing their results. In other news, the largest-ever hotel transaction in the Nordics was announced. The weighted-average implied EBITDA yields on the stocks we cover are 4.85% for 2025e and 5.22% for 2026e.

Klaveness Combination Carriers (Buy, TP: NOK125.00) - Undervalued busi...

Despite negative revisions to our 2025e EBITDA on the Q1 guidance and weaker underlying markets, we still believe Klaveness Combination Carriers has a superior risk profile from its dynamic market exposure (dry bulk, tanker and fuel prices), while also achieving 2025–2026e earning yields in line with or above its pure sector peers. Thus, we find the stock remains undervalued, and we reiterate our BUY. We have lowered our target price to NOK125 (128).

P/NAV of 0.64x, but downside to '25 estimates

Tender offer and more Q4 results

After surpassing one-third of the votes in Entra this week, Castellum announced it would present a mandatory offer for all shares in the company. The Q4 reporting season has continued, with several names releasing results. The weighted-average implied EBITDA yields on the stocks we cover are 4.61% for 2025e and 5.03% for 2026e.

Q4 miss, Q1 guidance as expected

SpareBank 1 Østlandet (Hold, TP: NOK158.00) - Solid post-merger quarte...

Helped by strong core revenues, ROE was 11.5% in Q4 (Totens Sparebank included from 1 November), despite somewhat elevated costs (partly driven by one-offs) and loan losses. Implying a ~60% payout ratio and a 6.3% dividend yield, the board proposed a 2024 DPS of NOK10.3. We have raised our 2025–2026e EPS by ~3%, and our target price to NOK158 (150). That said, at a dividend-adjusted 2026e P/E of 10.2x, we still find the valuation fair and reiterate our HOLD.

Ambea (Buy, TP: SEK123.00) - In capital-allocation mode

Q4 showed still-solid revenue, earnings and FCF generation, meeting its medium-term >9.5% EBITA margin target (Q4 LTM 9.7%) already 2024. We see a strong case, given: 1) the robust demand outlook combined with an asset-light, cash-generating model; 2) renewed execution on bolt-on acquisitions and dividends/share buybacks; and 3) an attractive valuation at 2025–2027e FCF yields of 9–10%. We reiterate our BUY and have raised our target price to SEK123 (120).

Sparebanken Sor: 1 director

A director at Sparebanken Sor bought 2,000 shares at 203.312NOK and the significance rating of the trade was 69/100. 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 clear...

Humana (Buy, TP: SEK53.00) - Back in capital allocation mode

The Q4 results solidified Humana’s return to stronger execution, with financial gearing again at an investment-grade level, allowing for more investor-friendly capital allocation (DPS SEK1.00 and renewed share buybacks). We find the new management’s priorities logical, and have minorly revised our 2025–2027e EPS. We reiterate our BUY and SEK53 target price on the operating and financial credentials, focusing on Humana’s market opportunity, operating profile, financial outlook and valuation.

Humana AB: 2 directors

A director at Humana AB bought 2,500 shares at 37.730SEK and the significance rating of the trade was 51/100. 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 show...

Sparebanken Sør (Buy, TP: NOK224.00) - Solid core revenues and costs

Aided by lower costs and improved fee income, SOR reported a Q4 ROE of 9.8%, despite some margin pressure. The board proposed a 2024 DPS of NOK12.21, implying a ~67% payout ratio (~50% policy) and 6.0% dividend yield. The bank guided for a c2.8%-point benefit from the upcoming new standard method. We reiterate our BUY and NOK224 target price to reflect the agreed exchange ratio and our target price for SVEG.

Mixed Q4 results

This week, Fabege, Atrium Ljungberg, Pandox, JM and Peab reported a mixed set of Q4 results. We have HOLD recommendations for all these stocks. The weighted-average implied EBITDA yields on the stocks we cover are 4.47% for 2024e and 4.94% for 2025e.