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1. Company Snapshot

1.a. Company Description

Deutsche Wohnen SE develops and manages residential properties in Germany.The company operates through four segments: Residential Property Management, Disposals, Nursing home operators, and Nursing Properties.Its property portfolio consists of approximately 160,000 residential and commercial units; nursing properties with approximately 10,580 beds; and apartments for assisted living.


The company manages and markets nursing and residential care homes.Deutsche Wohnen SE was founded in 1924 and is headquartered in Berlin, Germany.Deutsche Wohnen SE operates as a subsidiary of Vonovia SE.

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1.b. Last Insights on DWNI

Deutsche Wohnen SE's recent stock performance has been negatively impacted by the company's struggles to maintain profitability amidst rising costs and declining rental income. The company's efforts to reduce costs through share buybacks, announced in Q3 2023, have been insufficient to offset the decline in rental income. Additionally, the company's recent announcement of a €1.5 billion share buyback program in November 2023, may not be enough to boost investor confidence, given the company's declining profitability.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Deutsche Wohnen (ETR:DWNI) shareholders are up 3.9% this past week, but still in the red over the last three years

Nov -25

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Vonovia Deal Offers Way Out for Elliott’s Deutsche Wohnen Bet

Sep -19

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A Look At The Fair Value Of Deutsche Wohnen SE (ETR:DWNI)

Aug -08

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Investors in ad pepper media International (ETR:APM) have unfortunately lost 52% over the last three years

Dec -17

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‘It was a mistake’: The city that fell into a corporate landlord trap

Nov -14

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Shareholders in APG|SGA (VTX:APGN) are in the red if they invested five years ago

Oct -29

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Deutsche Wohnen Second Quarter 2023 Earnings: €1.78 loss per share (vs €1.70 profit in 2Q 2022)

Aug -10

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Deutsche Wohnen (ETR:DWNI) shareholders have endured a 46% loss from investing in the stock three years ago

Aug -02

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.47%)

6. Segments

Rental

Expected Growth: 2.5%

Rental growth of 2.5% driven by strong demand for housing in urban areas, particularly in Berlin, where Deutsche Wohnen SE has a significant portfolio. Additionally, the company's value-add initiatives, such as modernization and reletting of existing properties, contribute to rental growth. Furthermore, the German government's rent control policies and low interest rates support the rental market, driving growth.

Other

Expected Growth: 1.8%

Deutsche Wohnen SE's 1.8% growth is driven by increasing demand for rental apartments in Germany, fueled by urbanization and a shortage of affordable housing. Additionally, the company's strategic acquisitions and efficient cost management contribute to its growth. Furthermore, the German government's rental price brake and the company's focus on sustainable and modernized properties also support its growth momentum.

Development

Expected Growth: 4.2%

Deutsche Wohnen SE's 4.2% growth is driven by increasing demand for affordable housing in Germany, fueled by urbanization and a growing population. Additionally, the company's strategic acquisitions and divestments, as well as its focus on sustainable and modernized properties, contribute to its growth momentum.

Value-add

Expected Growth: 3.5%

Deutsche Wohnen SE's 3.5% growth is driven by increasing demand for affordable housing in Germany, fueled by urbanization and low interest rates. Additionally, the company's focus on value-add initiatives, such as energy-efficient renovations and digitalization, enhances its portfolio's attractiveness, leading to higher rental income and property values.

Recurring Sales

Expected Growth: 2.8%

Deutsche Wohnen SE's 2.8% recurring sales growth is driven by a combination of factors, including a strong German economy, increasing demand for rental apartments, and the company's strategic acquisitions and portfolio optimization. Additionally, the company's focus on modernization and renovation of its properties has led to higher rental income and longer-term contracts, contributing to the growth.

Consolidation

Expected Growth: 2.2%

Consolidation with Deutsche Wohnen SE driven by 2.2% growth, fueled by increasing demand for affordable housing, favorable demographics, and strategic acquisitions. Additionally, cost synergies from the merger, improved operational efficiency, and a strong balance sheet contribute to the growth momentum.

7. Detailed Products

Residential Rentals

Deutsche Wohnen SE offers a wide range of residential rental properties, including apartments and houses, in various locations across Germany.

Commercial Rentals

The company provides commercial rental spaces, including offices, retail spaces, and warehouses, to businesses and entrepreneurs.

Property Management

Deutsche Wohnen SE offers property management services, including maintenance, repairs, and administrative tasks, to property owners and investors.

Real Estate Development

The company develops and constructs new residential and commercial properties, including apartments, houses, and commercial buildings.

Property Sales

Deutsche Wohnen SE sells residential and commercial properties to individuals, investors, and businesses.

8. Deutsche Wohnen SE's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Deutsche Wohnen SE is medium, as there are alternative options for housing and real estate investments, but they are not highly attractive or widely available.

Bargaining Power Of Customers

The bargaining power of customers for Deutsche Wohnen SE is low, as individual customers have limited negotiating power and the company has a strong market position.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Deutsche Wohnen SE is medium, as the company relies on a network of suppliers for construction and maintenance services, but has some flexibility to switch suppliers if needed.

Threat Of New Entrants

The threat of new entrants for Deutsche Wohnen SE is low, as the company has a strong market position and significant barriers to entry, including high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Deutsche Wohnen SE is high, as the company operates in a competitive market with several large players, and there is a high level of competition for tenants and resources.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 38.59%
Debt Cost 3.95%
Equity Weight 61.41%
Equity Cost 6.99%
WACC 5.82%
Leverage 62.84%

11. Quality Control: Deutsche Wohnen SE passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
CTP

A-Score: 6.6/10

Value: 4.8

Growth: 6.8

Quality: 6.7

Yield: 6.2

Momentum: 6.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
VGP

A-Score: 5.8/10

Value: 3.1

Growth: 6.2

Quality: 7.0

Yield: 5.6

Momentum: 6.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Catena

A-Score: 4.4/10

Value: 3.1

Growth: 4.4

Quality: 6.4

Yield: 3.1

Momentum: 1.5

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Deutsche Wohnen

A-Score: 4.2/10

Value: 7.2

Growth: 2.7

Quality: 5.8

Yield: 0.0

Momentum: 2.5

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Castellum

A-Score: 4.2/10

Value: 4.2

Growth: 2.8

Quality: 5.7

Yield: 3.8

Momentum: 1.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Atrium Ljungberg

A-Score: 3.6/10

Value: 3.0

Growth: 2.3

Quality: 5.4

Yield: 5.0

Momentum: 1.5

Volatility: 4.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

21.0$

Current Price

21$

Potential

-0.00%

Expected Cash-Flows