Vonovia

The election winner in Berlin is strengthening demands against large housing companies, increasing political risks for Vonovia and heavily weighing on the share price. Vonovia is currently trading at roughly a 60% discount to book value, which prices in significant expropriation and regulatory risks for investors. Despite regional comparisons, for example with Vienna, average Vonovia rents in Berlin are substantially below local new-build prices, and rent caps often have undesirable side effects, according to the author. A rise in interest rates and political uncertainty together explain the persistent selling pressure on the stock. » Więcej na t-online.de

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. » Więcej na 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. » Więcej na deraktionaer.de