Kepler cuts Wallenstam to 'hold' on lower returns, high valuation

Wallenstam AB

16/12/2025 09:39

** Kepler Cheuvreux cuts Swedish landlord Wallenstam WALLb.ST to "hold" from "buy" citing lower returns and high valuation

** The broker says sharply higher construction costs coincide with significantly lower immigration to Sweden, which means lower demand for newly produced housing

** Kepler estimates Wallenstam's return on investments at around 20-25%, compared to previous range of 40-45%

** It expects the major Stockholm property Wallenstam acquired last year to have a negative effect of 1.2% on the company's rental income in the short term

** The stock trades at a premium of around 40%, vs around 50% in February 2022, but the need for new construction has decreased at the same time, the broker says

** The landlord's initial dividend yield of 3.2% is also too low for investors, it adds

** Out of the six analysts covering Wallenstam, one rates it "strong buy", three "hold" and two "sell" - LSEG data

(Reporting by Vera Dvorakova)

((vera.dvorakova@thomsonreuters.com))