Q2 came in weaker than we had expected, although the reason continues to be a very dampened market. Particularly Corporate Finance was soft, while Investment Management was solid with positive FX-adjusted AUM growth of SEK3.3bn. However, we believe all 'weak hands' are practically gone in Catella, as even a seemingly weak report did not lead to any substantial decrease in the share price.

Management commented in the earnings call that the interest in Kaktus is high, though investors for this asset type ("core asset") have been very cautious for some time. Catella has had over a dozen pretty active dialogues with large investors. Thanks to its strong financial position, and thus no stress for increased liquidity, Catella will not accept a discount offer on Kaktus. Thus, we remain confident that Catella will generate a substantial profit on Kaktus once it decides to divest it.

Following the Q2 report, we only make small and short-term estimate changes. Our fair value range is changed from SEK27-69 to SEK25-70, with Base Case intact at SEK56. With the expected divestment of Kaktus about to reveal hidden value in Catella, we estimate Catella to be trading at 4x EBIT for 2025e - and even lower for 2026e. While investor sentiment around Catella remains low as the market remains weak, we see an attractive valuation.