UNBLF - Unibail-Rodamco-Westfield: Capital Structure Creates A Good Entry Point For Long Calls

• Q3 results demonstrate operations can stabilize at a level around 10% lower than 2019. I estimate the current run-rate for Adjusted Recurring EPS to be around 7 EUR/share, absent restrictions.
• Higher cost of debt and lower valuation net initial yield make for a tough comparison with European peer Klepierre.
• The Loan-to-value should dip below 40% even if assets are disposed of at around the current marked-implied net initial yield of around 5.75%.
• The current Adjusted Recurring EPS multiple of around 8.3 is very attractive but is likely to be watered down by disposals.
• The most attractive way to position in the shares seems to be via long call options or via a long straddle.

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