Q1 sales came in 10% below ABGSCe, which mainly explains our lower sales revision for 2022e (-2.6%). For ’23e and ’24e, our revisions are positive (+3.6% and +3.5%), due to positive effects from four acquisitions by Företagsparken and Point thus far in 2022. We already model some acquisitions for Företagsparken, which explains why the revisions are so small. The larger EBIT revisions are due to: 1) higher estimated operating costs, which have come up and exceeded our estimates during Q4’21 and Q1’22, 2) lower earnings estimates from JVs, partly explained by the divestment of Svenska Bostadskompaniet, and 3) slightly lowered value change estimates in ’23e and ’24e due to added macroeconomic uncertainty since our 1 March update.
77% of outstanding debt on floating terms
Our EPS is primarily down on higher interest costs: as for the rest of our coverage, we have incorporated a gradual repo rate hike of 100bps until 2024e. Because we estimate that 77% of FASTAT’s outstanding debt is on floating interest terms, and 12% matures during 2024, the +100bps rate hike translates to +89bps on FASTAT’s average interest rate. Note that the EPS percentage changes appear large because the absolute numbers are small.
Fair value range of SEK 16.7-20.4
At last reported EPRA NRV of SEK 28, the share is trading at a 37% discount, which is well below its 2-year (15%) and 3-year (24%) averages. We forecast an annual EPRA NRV growth (inc. dividends) of ~8.5% in 2022e, and ~11% in 2023e and 2024e. We set a fair value range of SEK 16.7-20.4, which implies a 46%-34% discount to EPRA NRV in Q1’23e.
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