S Immo: Good 1Q result, Accumulate confirmed   

– Solid 1Q12 results: S IMMO’s recently published quarterly results were above our estimates, mainly due to a better than expected revaluation result and a positive tax effect.


– Increased estimates: We had to adjust upwards our estimates for 2012. We now expect EPS of EUR 0.32 (after EUR 0.27). So, instead of a minor decline, we now expect a net result increase of approx. 7% in 2012. Our 2013 EPS estimate was left unchanged.


– Peer group comparison: The peer group shows that S IMMO is among the better companies in terms of profitability as measured by ROE, but also displays the highest P/BV multiple among the Austrian peers. The dividend yield is the lowest. Overall, we see moderate upside potential based on its peers.


– Valuation based on DCF alone: Instead of a weighted average of the DCF result and NAV, we now fully switch to DCF, as the NAV per share is not a realistically achievable target in the current economic situation. This leads us to confirm both our Accumulate recommendation and target price of EUR 5.2.


– Share buyback as further trigger: The company can still continue its share buyback until the end of May, when the current program ends. However, S IMMO stressed in its quarterly results release that it may start another program, which could be a clearly positive trigger for the share. The EUR 0.10 ex-dividend day is June 15, 2012. The payout will be without 25% withholding tax.