Original-Research: MLP SE (von NuWays AG): Kaufen

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Original-Research: MLP SE - from NuWays AG

Classification of NuWays AG to MLP SE

Company Name: MLP SE
ISIN: DE0006569908

Reason for the research: Update
Recommendation: Kaufen
from: 04.06.2024
Target price: EUR 11.50
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Henry Wendisch

Only small impact from potential ECB rate reduction

On Thursday, June 6th, the ECB might reduce its main refinancing rate by
25bps to 4.25%, which would have only a small overall impact on MLP's
banking business while in return should allow for upswings in Wealth
Management and Real Estate. In detail:

Low impact on Banking: A potential rate reduction by 25bps is already
reflected in our estimates for the end of Q2. Now with Q2 only lasting for
three more weeks, we feel comfortable with our current estimates.
Therefore, the strong interest income experienced in Q1'24 (EUR 22.3m)
should only decrease slightly to EUR 20m (eNuW) in Q2, before the potential
25bps rate drop takes a full effect for Q3 with EUR 19m of expected interest
income. For Q4, we conservatively model another 25bps rate reduction to
4.0% which would imply an interest income of EUR 18m. Accordingly, we expect
interest expenses to also decrease, as MLP would likely reduce rates for
customer deposits, however with some delay. In sum, FY'24e interest
income would still come in at EUR 80m, 22% above FY'23, while the interest
result should amount to EUR 49m, 4% above FY'23 levels. Should rate
reductions be postponed or completely abandoned this year, our estimates
would thus turn out to be conservative. (see p. 2 for details)

Upside for Wealth Management: As capital marktes usually react positively
to decreasing rates, the ongoing strong performance of FERI's funds could
yield further performance fees in the course of the year. As these are not
reflected in our estimates, there could be further upside from Wealth
Management for MLP. However, the main funds (EquityFlex and Optoflex) are
heavily focused on US markets, which is why the FED interest rate is more
relevant here.

Recovery of Real Estate from low levels: The newly introduced tax incentive
for new constructions coupled with the outlook of declining financing rates
(currently 3.7% for 10y fixed rate mortgages vs. 4.2% in Nov'23), could
give the still burdened real estate market a little push towards
normalization from muted levels.

All in all, MLP's well diversified business model should make investors
feel relaxed about potential rate reductions, especially as the business
segments are negatively correlated.

Against this backdrop, we reiterate our BUY recommendation with an
unchanged PT of EUR 11.50 (based on FCFY and SOTP) and confirm MLP's position
in our NuWays' AlphaList.

You can download the research here:
http://www.more-ir.de/d/29955.pdf
For additional information visit our website
www.nuways-ag.com/research.

Contact for questions
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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The issuer is solely responsible for the content of this research.
The result of this research does not constitute investment advice
or an invitation to conclude certain stock exchange transactions.

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Quelle: dpa-AFX