Last Update 06 Dec 25
WIHL: Core Leasing And Asset Moves Will Support Future Resilience
Analysts have trimmed their price target on Wihlborgs Fastigheter to SEK 105 from SEK 120, reflecting more conservative estimates and a view that the shares now fairly reflect valuation.
Analyst Commentary
Analysts characterize the new SEK 105 target as more in line with Wihlborgs Fastigheter's near term earnings power and balance sheet profile, reflecting a reset of expectations rather than a fundamental shift in the long term business case.
Bullish Takeaways
- Bullish analysts still see the company as fairly valued at the new target, suggesting downside risk is more limited after the recent share performance.
- The revised estimates incorporate a more conservative macro and rate backdrop, which some view as de risking the numbers and making future estimate beats more achievable.
- Operational execution in the core property portfolio is seen as resilient, supporting the view that cash flow generation can underpin the current valuation.
- The price target cut is framed as a calibration to market conditions rather than a structural downgrade of the company’s long term growth potential.
Bearish Takeaways
- Bearish analysts argue that the previous valuation multiple was too demanding relative to slower expected rental growth and higher financing costs.
- Lowered earnings estimates signal a more cautious stance on Wihlborgs Fastigheter's ability to drive margin expansion and value accretive development in the current environment.
- The move from a more positive stance to a neutral one reflects concern that upside catalysts are limited in the short to medium term.
- Some see the new target as leaving limited valuation headroom if execution stumbles or the property market weakens further.
What's in the News
- Nowaste Logistics signs a three year lease for 6,200 sqm at Atforadlingen 11 in Hamncity, southern Helsingborg, reinforcing Wihlborgs' position in a key logistics hub ahead of the planned new container port (Key Developments).
- Capio Hjärnhälsan opens a new 1,100 sqm psychiatric clinic at Drottninggatan 7 in central Helsingborg under a five year lease with Wihlborgs, further diversifying the property’s healthcare tenant mix (Key Developments).
- A new restaurant concept, Bankpalatset, will open in spring 2026 in the historic Svea building at Jarnvagsgatan 7 in central Helsingborg, replacing long standing tenant Heat Helsingborg and aiming to create a new culinary hub (Key Developments).
- NP Innovation will relocate its headquarters and expand production to Wihlborgs' Olsgard 8 property in Fosie, Malmo in December 2025 under a five year, 3,700 sqm lease, supporting growth in the aquaculture segment (Key Developments).
- Wihlborgs acquires industrial property Snarskogen 2 for SEK 26.5 million and signs a ten year lease with Nomo Industrial Automation, while divesting two Hamncity properties for SEK 41.5 million to support Helsingborg’s future port plans (Key Developments).
Valuation Changes
- Fair Value Estimate: unchanged at SEK 109.6, indicating no revision to the modelled intrinsic value despite the lower price target.
- Discount Rate: risen slightly from 9.70 percent to 10.04 percent, implying a marginally higher required return and risk premium.
- Revenue Growth: edged down from 5.83 percent to 5.76 percent, reflecting a modestly more cautious outlook on top line expansion.
- Net Profit Margin: increased slightly from 42.63 percent to 43.00 percent, suggesting a small improvement in expected profitability.
- Future P/E: essentially unchanged, moving marginally from 20.33x to 20.38x, indicating a stable forward valuation multiple.
Key Takeaways
- Record high leasing volumes and improved occupancy rates indicate potential for increased revenue and enhanced profit margins.
- Strategic acquisitions and project investments are expected to positively impact earnings and asset valuations, supporting company expansion.
- High leverage and exposure to currency risk combined with increased vacancy rates could impact earnings, financial flexibility, and revenue stability in fluctuating market conditions.
Catalysts
About Wihlborgs Fastigheter- A property company, owns, develops, rents, and manages commercial properties in the Öresund region, Sweden.
- Record high volume of new leases in 2024 and continued strong leasing activity in 2025 indicates potential for increased rental income, especially as new leases come into effect and contribute to revenue growth.
- Ongoing project investments with successful outcomes suggest future enhancements in rental value and operating surplus, which can boost earnings and profit margins.
- The acquisition of property from Granitor is expected to contribute positively to financial results in future quarters, potentially impacting both revenue and asset valuations.
- Improved occupancy rates anticipated by the end of 2025, with the largest effect from new leases expected in 2026, could lead to higher revenue and better net margins due to economies of scale.
- Good cash flow generation and high running yield suggest a strong foundation for further expansion, which could drive up earnings and increase the company's valuation.
Wihlborgs Fastigheter Future Earnings and Revenue Growth
Assumptions
How have these above catalysts been quantified?- Analysts are assuming Wihlborgs Fastigheter's revenue will grow by 6.3% annually over the next 3 years.
- Analysts assume that profit margins will shrink from 44.4% today to 42.1% in 3 years time.
- Analysts expect earnings to reach SEK 2.2 billion (and earnings per share of SEK 7.32) by about September 2028, up from SEK 1.9 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting SEK3.0 billion in earnings, and the most bearish expecting SEK1.7 billion.
- In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 21.0x on those 2028 earnings, up from 14.8x today. This future PE is greater than the current PE for the GB Real Estate industry at 16.7x.
- Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
- To value all of this in today's terms, we will use a discount rate of 9.48%, as per the Simply Wall St company report.
Wihlborgs Fastigheter Future Earnings Per Share Growth
Risks
What could happen that would invalidate this narrative?- The increased vacancy rates in certain areas, such as offices in Helsingborg and the industrial portfolio, could affect future rental income and occupancy rates, leading to potential decreases in net margins.
- The company’s net debt to EBITDA ratio of 10x and an LTV ratio of 49.5% suggests high leverage, potentially impacting earnings and financial flexibility, especially if interest rates rise or economic conditions worsen.
- Exposure to currency risk, as evidenced by currency translation impacts on property valuations, could negatively affect revenue and profit margins, especially given the differences between the Swedish krona and Danish krone.
- Potential delays or gaps between lease terminations and new tenant move-ins, as well as market conditions with fewer new projects, may lead to temporary reductions in rental income and affect revenue stability.
- Dependence on key sectors such as government tenants, which make up significant portions of rental income, creates sector concentration risk that could impact future cash flows and net margins if any adverse changes occur in these sectors.
Valuation
How have all the factors above been brought together to estimate a fair value?- The analysts have a consensus price target of SEK112.4 for Wihlborgs Fastigheter based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SEK120.0, and the most bearish reporting a price target of just SEK100.0.
- In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be SEK5.1 billion, earnings will come to SEK2.2 billion, and it would be trading on a PE ratio of 21.0x, assuming you use a discount rate of 9.5%.
- Given the current share price of SEK90.75, the analyst price target of SEK112.4 is 19.3% higher.
- We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.
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Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
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