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Castellum rating cut to 'underweight' to reflect weakening performance

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** Barclays cuts rating on Swedish real estate group Castellum's CAST.ST shares to "underweight" from "overweight"

** Brokerage notes company's like-for-like rent growth of 2.9% in Q1 was "well below" inflationary increases and free cash flow (FCF) generation is limited

** Barclays believes company remains over-leveraged and sees headwinds to Castellum's asset values, which it says threaten to weigh further on leverage position

** While brokerage says company's shares have outperformed since last year's equity raise, it expects increasing operational headwinds and sees limited upside potential over the coming year

** It views company's 2024 EPS yield estimate of 6.7% and FCF yield estimate of close to 4.4% to be unattractive

** Barclays cuts PT on Castellum's shares to 110 Swedish crowns from 135 crowns

** Brokerage reiterates preference for peer Catena CATE.ST, keeping it at "overweight"

Reporting by Elviira Luoma


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