Jefferies lifts Castellum on buyback drive despite weak office market By Investing.com
Jefferies upgraded Castellum AB to hold from underperform and raised its price target to SEK125 from SEK105, citing planned SEK15.6 billion share buybacks in 2026-27 (25% of Dec 2025 shares) and revised forecasts. Jefferies expects EPS of SEK8.45 for 2026 and notes weak office demand, with 2026-27 credit metrics remaining tight.
How this was made
The 30-second read
Why it matters
Jefferies’ upgrade and PT increase are explicitly tied to a large, scheduled buyback program and updated revenue/EPS assumptions, while the office market remains sluggish with negative net leasing dynamics and tight forward credit metrics.
Market read
For CAST, the actionable change is the broker’s rating and PT, supported by a quantified buyback plan, but tempered by leasing weakness and tight 2027 credit metrics.
What to watch
The article notes 2027 credit metrics are tight (EPRA LTV 53.7%, interest coverage 2.4x, net debt/EBITDA 11x). If refinancing costs rise or leasing worsens, buyback support could reverse.
Background
Castellum is pursuing a return-on-equity-led capital recycling strategy, selling assets that fail a 10% ROE requirement and returning proceeds via buybacks and debt reduction.
Ticker impact
Jefferies upgraded Castellum AB to hold and raised its PT to SEK125, citing SEK15.6B buybacks in 2026-27 to support the stock short term.
Near-term downside may be cushioned by the announced buyback schedule, but valuation and leasing trends could cap upside if net leasing stays weak.
The article provides a concrete broker action (upgrade, PT change) plus specific capital-return and leasing/credit-metric details that shape the risk-reward for CAST.
Market effects
Highlights how European office landlords may use capital recycling and buybacks to offset weak leasing, keeping focus on ROE thresholds and credit metrics.
Relevant to Swedish real estate sentiment, where buyback announcements can temporarily stabilize pricing despite rising vacancy.
Limited beyond the European office REIT/real-estate complex, unless buyback-led support becomes a broader read-across theme.
Counterpoint
Buybacks may not fix the core issue: negative net leasing and rising vacancy imply cash flows could deteriorate, making the stock vulnerable if credit metrics tighten further.
Key entities
- companyCastellum AB
Swedish office real estate company; subject of Jefferies upgrade, PT raise, and buyback/capital recycling details.
- brokerJefferies
Issued the upgrade from underperform to hold and raised the price target to SEK125.
- pension fundAP7
Buyback deal counterparty referenced for a SEK3.4B buyback in H1 2026.
- pension fundAlecta
Referenced for a sale that funded a SEK3.0B buyback launched this week.
