(Bloomberg) -- Equity analysts at Sweden's second biggest bank have described the country's real estate industry as “running on fumes” with valuation premiums at an all-time high.
Svenska Handelsbanken's Johan Edberg and Oscar Lindquist said in a research note that downside risks stemming from interest rates, capital markets, input prices and climate change are not fully reflected in stock prices.
“We now have a clear negative tilt towards the sector universe, mainly based on valuations, implicit expectations over the next 12 months and the risk of deteriorating market sentiment,” they wrote.
In line with that view, Catena AB was cut to hold from buy, sending the shares 3.4% lower in early trading on Wednesday. There were also recommendation downgrades for Stendorren Fastigheter AB and Platzer Fastigheter Holding AB, which triggered declines of 4.2% and 5.1% respectively.
Read More: Swedish CEO Sounds Alarm on ‘Excessive' Stock Market Valuations
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