Catella - A promising 2026 outlook

• Q4 a bump in the road but we remain optimistic on outlook
• Estimates down given a lower AUM base
• 2026e-27e EV/EBIT of 3-5x with easy comps

Q4 softer than expected

Catella's Q4 results were below both ABGSC and FactSet consensus expectations, with EBIT coming in at SEK 11m (63m) compared to ABGSCe of SEK 101m. The results were negatively impacted by a SEK 151m impairment of KöTower, one of Catella's Principal Investments, following an updated property value assessment. The underlying performance within Investment Management and Corporate Finance stood out positively in the quarter. As such, we see the negative share price reaction of -14% as unjustifiably harsh. We remain optimistic about 2026 given the macro backdrop, with variable fees within Investment Management expected to pick up as transaction activity gradually increases. This should drive both improved margins and bottom-line earnings growth in the coming quarters.

Lower AUM base cuts our 2026-27 forecasts

As AUM in Q4 came in 3% below our forecast, we have cut our AUM estimates, which lowers our earnings forecasts within Investment Management. In sum, our group EBIT estimates are reduced by 14% for 2026 and 7% for 2027 following the report. Despite lower estimates, we continue to forecast strong earnings growth in the coming years, with the help of market activity picking up.

2026e-27e EV/EBIT of 3-5x with dividend yield of 4-8%

Despite Q4 falling short of our expectations, we think the company has many attractive fundamentals, including an impressive track record within Investment Management. The balance sheet remains strong, with a cash position of SEK 1.6bn (~85% of market cap), providing Catella with the necessary resources should the right opportunities arise. The comps are easy, and we believe the transaction activity outlook is promising. When applying our latest revisions, Catella is trading at an EV/EBIT of 3-5x for 2026e-27e and a dividend yield of 4-8%.