First Berlin Equity Research has published a research update on Aroundtown SA (ISIN: LU1673108939). Analyst Ellis Acklin reiterated his BUY rating and decreased the price target from EUR 4.60 to EUR 3.50.

Full year reporting was close to FBe, but management continue to batten down the hatches and brace for intensifying macro headwinds. AT will now recommend to the June AGM that a dividend not be paid on 2022 earnings in order to preserve liquidity. FFO 1 is also expected to be 9% to 17% lower Y/Y in 2023 (guidance: €300m to €330m) with modest rent indexation and improving hotel rent collection rates overshadowed by higher perpetual note payments, a rising cost of debt, and further disposal effects. It is fiendishly difficult to predict when property stocks might trough. This will hinge upon when and where interest rates peak. We have also upped the risk free rate in our model to 2.4% (old: 1.5%) to track the development in the German 10y Bund, which points to a €3.5 TP (old: €4.6). Our rating remains Buy.