NP3 Fastigheter AB (publ) (NP3.ST) fair value

ACCE thesis

NP3 Fastigheter owns and develops rental residential and commercial property in Sweden, with most of its income coming from apartments in Stockholm, Gothenburg and other Swedish cities. Its edge is scale in a fragmented market, where a large, stable rent roll gives it purchasing and financing advantages over smaller landlords. Reported revenue grew 11.7% and the operating margin sits at 78.7%, which is unusually high and reflects how much of the business is rent collected against relatively fixed costs. The stock trades on a trailing P/E of 8.6 against a forward P/E of 16.5, a gap that implies the market expects earnings to fall or that the trailing figure is flattered by one-off gains, so that is the first thing to check. With a 13.7 billion SEK market cap and no index membership, the name is worth a deeper look mainly to reconcile that earnings gap and to see how much of the 15.6% ROE depends on leverage and property revaluations.