Vonovia

Vonovia’s price falls sharply as investors, according to analysis, price in significant political risks following the Left’s election victory and demands for expropriations. The stock is currently trading at about a 60 percent discount to book value, and higher interest rates are weighing on the real estate sector. According to data, Berlin rents are on average not excessive (Vonovia average net cold rent €8.81), and regulation or expropriations would hardly create new housing but could deter investors. » More on t-online.de

JPMorgan has reduced its target price for Vonovia from €34.50 to €26.00 and, despite keeping a buy rating, flagged a possible dividend reduction. The bank recommends selling roughly €1 billion of property to pay down debt; if such transactions do not occur, a dividend cut could be necessary. Goldman Sachs recently also sharply lowered its target and downgraded the stock, leaving investors cautious. JPMorgan nevertheless points to the low valuation and the resilience of the German residential property market as supporting factors. » More on deraktionaer.de

Electoral gains by the Left in Berlin, coupled with calls for expropriations, have increased political risks for Vonovia and driven the stock sharply lower in recent years. Vonovia is currently trading at roughly a 60 percent discount to book value, which the capital markets interpret as a high expectation of political risk. At the same time, rising interest rates and weaker fundamentals are additional burdens, while the report finds that regulation and a rent cap will neither protect tenants nor create new housing. » More on t-online.de