Kepler cuts SBB to 'reduce,' deems valuation 'too demanding'

About this update from Samhallsbyggnadsbolaget I Norden Ab Class B

** Kepler Cheuvreux downgrades Swedish real estate group SBB OMXSTO:SBB_B to "reduce" from "hold" on the back of "too demanding" valuation ** It points out that the stock price is up by nearly 80% in last two months, priced at SEK 5.5 on Wednesday at 0913 GMT** Kepler notes that the landlord's better-than-expected Q1 report included a particularly high financial income, which in the broker's view does not reflect the current run rate ** Contributions from associates and JVs were significantly below their underlying earnings capacity, it adds** Given the above, "it is hard to draw any definitive conclusions from the report," as per the brokerage** It sees slightly lower financial and administrative costs going forward, which helps to mitigate the negative effect from the rights issue of about 11% ** Kepler raises PT by 22% to SEK 4.50 citing earnings revisions, the time value effect, and a reduced risk premium to 10% from 20%

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