Baader Bank confirmed CA Immo at Buy and increased target price to 12.2 euros from 11.4 euros. Analysts changed their estimates for 2012-14E. The main revisions relate to a better than expected net rental income margin and an expected sale of the Tower 185 in 1H13E, resulting in a noticeable decline of the leverage. Analysts now expect FFO per share to reach 0.41 euros in 2012E (before: 0.36 euros), to decline to 0.36 euros in 2013E driven by disposals (before: 0.40 euros) and to improve to 0.46 euros (before: 0.43) for 2014E, mainly driven by cost reduction. Analysts keep their DPS estimate of 0.38 euros for 2012E, of 0.39 euros for 2013E and of 0.41 euros for 2014E. Analysts expect the NAVps to be 21.57 for 2013E (before: 21.56 euros) implying a 50% discount to NAV.
Analysts believe that the company will be able to deleverage its balance sheet to a net LTV of about 50% by 2013E through disposals, particularly the disposal of the Tower 185 which we expect to happen in 1H13. Baader Bank further expects the company to reduce its cost base with the reduction of the balance sheet. The new CFO also announced that going forward they want to focus on less capital-intensive developments. The biggest risk for the company is valuations in Eastern Europe as yields may soften for the region, but recent letting successes should help to mitigate the effects, analysts say.