DB resumes Vonovia with 'buy' on stock's undervaluation

Deutsche Wohnen SE

16/12/2021 10:30

** Deutsche Bank resumes coverage of German real estate
company Vonovia  VNAn.DE  with "buy" rating and PT at EUR 65 on
shares underperformance
    ** "We view initial dilution from the Deutsche Wohnen deal
as well priced and see upside on attractive stock valuation,"
the broker says
    ** It adds it believes Vonovia shares should trade at a
premium to peers, considering the company's portfolio
    ** DB sees strong strategic rationale behind the Deutsche
Wohnen  DWNG.DE  deal  urn:newsml:reuters.com:*:nASN001STE as it improves Vonovia's
portfolio quality, increasing the exposure to A-markets in
Germany to 59% from 46% previously
    ** The broker deems >5% FFO yield as attractive, sees room
for strong yield compression
    ** "On the back of the recent COVID spike we see defensive
German residential as a good choice," the broker says, also
highlighting that the new government in Germany seems moderate
on rent controls
    ** Out of 22 analysts that cover Vonovia, 17 rate the stock
"strong buy" or "buy", ​four rate it "hold" and one rates it
"sell"

 (Reporting by Tristan Chabba)
 ((Tristan.chabba@thomsonreuters.com))