Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
16.4% below
+19.6% to fair value
ACCE score
65
out of 100
P/E
10.4x
forward 11.0x
1-year return
+6.6%
Dividend yield
7.33%
NEPI Rockcastle N.V. in four questions
Plain answers, details below
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Overview
ACCE thesis
NEPI Rockcastle owns and operates shopping centres across Romania, Poland, Croatia, Slovakia and Serbia, with its largest assets concentrated in Romania and Poland. The business earns a 68.9% gross margin and a 61.7% operating margin on rental income, which is the kind of profitability you get from dominant regional malls with long leases and little need for heavy capital spending. Revenue growth of 4.3% is modest, so the investment case rests on rental escalation and occupancy in a region where retail space per capita remains low, rather than on rapid expansion. At a trailing P/E of 10.6 and a forward P/E of 11.2, the market is pricing the shares at a discount to the broader real estate sector, with the forward multiple slightly above trailing, implying earnings are not expected to step up materially. The stock is not in any major index, which may partly explain the valuation and is worth checking in the fund's liquidity and mandate work before going further.