Last Update 22 Nov 25
WIHL: Core Asset Expansion And Leasing Activity Will Drive Resilience
Narrative Update on Wihlborgs Fastigheter
Analysts have lowered their price target for Wihlborgs Fastigheter to SEK 105 from SEK 120, citing valuation concerns and reduced estimates as the main reasons for the downgrade.
Analyst Commentary
Bullish Takeaways
- Bullish analysts continue to acknowledge Wihlborgs Fastigheter's stable cash flow profile, which is seen as a positive in a challenging market.
- The company's high-quality asset base provides a foundation for resilience and long-term growth potential.
- Ongoing operational execution and disciplined management remain key strengths. This supports investor confidence despite recent valuation adjustments.
Bearish Takeaways
- Bearish analysts highlight current valuation levels as a concern. In their view, this leaves limited upside from current pricing.
- Recent reductions in estimates reflect a more cautious outlook on near-term growth and rental income expectations.
- There is increased scrutiny on potential headwinds from the broader macroeconomic environment. This could limit earnings visibility in the coming quarters.
What's in the News
- Capio Hjärnhälsan has opened a new psychiatric clinic occupying 1,100 square metres on Drottninggatan 7, Helsingborg, with a five-year lease agreement with Wihlborgs. The property also accommodates several other healthcare services. (Key Developments)
- Simon Weinberg is set to launch "Bankpalatset," a new restaurant concept, at Jarnvagsgatan 7 in Helsingborg in spring 2026. The landmark Svea building, currently home to Heat Helsingborg, will welcome a diverse culinary hub with various bars and a terrace. (Key Developments)
- NP Innovation will relocate its headquarters and expand production to Wihlborgs' premises at Olsgard 8, Malmö, in December 2025. The five-year lease covers 3,700 square metres and will provide room for further expansion in aquaculture. (Key Developments)
- Wihlborgs has acquired the Snarskogen 2 property in Vala Norra and signed a ten-year lease with Nomo Industrial Automation AB, strengthening their property cluster in the area. At the same time, Wihlborgs has divested two properties in southern Helsingborg to focus on other developments and support city port plans. (Key Developments)
- A Special/Extraordinary Shareholders Meeting of Wihlborgs Fastigheter AB is scheduled for April 22, 2026. (Key Developments)
Valuation Changes
- The discount rate has risen slightly to 9.70 percent from 9.60 percent, indicating a marginally higher risk premium.
- Revenue growth expectations have fallen slightly, now at 5.83 percent compared to the previous 5.90 percent.
- The net profit margin remains virtually unchanged, now at 42.63 percent versus 42.61 percent previously.
- Future P/E ratio estimates have increased marginally to 20.33x from 20.27x.
- Consensus fair value remains steady at SEK 109.6.
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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