** Kepler Cheuvreux cuts Swedish landlord Wallenstam OMXSTO:WALL_B to "hold" from "buy" citing lower returns and high valuation
** The broker says sharply higher construction costs coincide with significantly lower immigration to Sweden, which means lower demand for newly produced housing
** Kepler estimates Wallenstam's return on investments at around 20-25%, compared to previous range of 40-45%
** It expects the major Stockholm property Wallenstam acquired last year to have a negative effect of 1.2% on the company's rental income in the short term
** The stock trades at a premium of around 40%, vs around 50% in February 2022, but the need for new construction has decreased at the same time, the broker says
** The landlord's initial dividend yield of 3.2% is also too low for investors, it adds
** Out of the six analysts covering Wallenstam, one rates it "strong buy", three "hold" and two "sell" - LSEG data