* Q2 beat with activity picking up * Pre-tax profit up by 13-16% for 2026-27e * 2025e-27e EV/EBIT of 4-6x with easy comps Q2'25: Second-strongest quarter ever Catella delivered a solid 7% earnings beat vs. FactSet consensus, with Corporate Finance standing out with a substantial earnings improvement q-o-q. The strong quarterly earnings in Q2, the second highest EBIT the company has even delivered, was driven by the divestment of the property development project Kaktus in Denmark, which contributed SEK 252m to the quarterly EBIT of SEK 315m. Following the divestment of Kaktus, Catella's cash position more than doubled q-o-q, to SEK 1.7bn (>60% of the market cap). We are positive about the buyback of SEK 600m in bonds announced in conjunction with the report, as it is shareholder-friendly, improves Catella's capital efficiency and reduces interest expenses. AUM and buyback raises EPS by 13-17% 2026-27e Following the stronger than expected sequential AUM trend in Q2, our Investment Management earnings estimates are raised by 3-7%. In addition, given the bond buyback announcement, our interest cost estimates are greatly reduced. In sum, our EPS estimates are up by 40% for 2025 and 13-17% for 2026-27. 2025-27e EV/EBIT of 4-6x with a 6-8% dividend yield The company has, in our view, many attractive fundamentals, including an impressive track record within Investment Management and attractive own-property investments. The balance sheet remains strong, providing Catella with the necessary resources should the right opportunities arise. The comps are easy, and we believe the transaction activity outlook is promising. This means that we expect strong yearly earnings expansion from here. In addition, when applying our latest earnings revisions, Catella is trading at an EV/EBIT of 4-6x for 2025e-27e and offers an appealing dividend yield of 6-8% p.a.
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