Castellum shares fall 3% after J.P. Morgan cuts outlook, flags governance concerns

Published 03/06/2025, 10:46
© Reuters.

Investing.com -- Shares in Swedish property firm Castellum (ST:CAST) fell over 2% Tuesday after J.P. Morgan lowered its earnings forecasts and flagged continued operational pressure across the company’s office portfolio.

The brokerage reiterated its “underweight” rating, citing weak first-quarter results and deteriorating occupancy trends. It placed Castellum on Negative Catalyst Watch ahead of second-quarter earnings due July 15.

J.P. Morgan cut its earnings per share estimates by 4% for 2025 and 5% for 2026, reflecting lower income and weaker like-for-like value growth. 

The brokerage’s projections are now 3% and 1% below Bloomberg consensus for 2025 and 2026, respectively.

In the first quarter, Castellum reported a 0.2% decline in like-for-like revenue. The office segment was hit by cancellations and bankruptcies, with occupancy dropping to 88.1% from 90%.

Analysts said they expect further declines in occupancy through the rest of the year as market conditions remain strained. 

They pointed to a slow leasing environment and macroeconomic uncertainty affecting tenant decisions.

The brokerage also cited governance concerns after Akelius, Castellum’s largest shareholder with a 13.5% stake, publicly criticized the company’s management. 

J.P. Morgan said this development could weigh further on investor sentiment. The price target was lowered to SEK 110 from SEK 118.

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