MLP SE Maintains Core Strength Despite Challenges

In a recent update from NuWays AG, MLP SE received a "BUY" recommendation, signaling investor confidence despite revised earnings expectations. The company announced a reduction in its full-year EBIT guidance to €90-100 million from the previous €100-110 million. This adjustment arose from lower-than-expected performance fees and underperformance in real estate development. Specifically, MLP recorded €2.8 million in Q3 performance fees, a significant drop from €17 million in the same period the previous year.

MLP decided to cease new real estate development projects, aiming to reduce business risk. Existing projects will be completed, with potential goodwill impairments anticipated. Despite these challenges, MLP's core business remains strong, achieving a 3% year-over-year growth in underlying sales for Q3. The company's banking sector emerged as a major profitability driver, boasting a 29% EBIT margin.

This solid core performance suggests the share price decline is an overreaction, presenting a buying opportunity at a revised target price of €12.50.