Vonovia AGM: Operational Gains and Goldman’s 40% Upside Call Shadowed by Furore Over Former CEO’s Severance

German landlord Vonovia faces shareholder anger over CEO severance as shares slide 23% in a year, but strong Q1 results and a 5.7% dividend yield prompt Goldman Sachs to see 40% upside.

Vonovia’s annual general meeting in Bochum on Wednesday laid bare a stark disconnect: the German landlord’s shares have tumbled 23% over the past twelve months and stand 26% below their 52-week peak of €30.16, even as the company delivered robust rental growth and a sharp uptick in its value-add services business. That tension dominated the first in-person AGM since 2019, where new management faced the floor for the first time.

The meeting, held at the RuhrCongress, quickly turned contentious. Shareholder representatives took aim at the severance package awarded to former chief executive Rolf Buch, demanding strict capital discipline at a time when the company is simultaneously working to transform its portfolio and reduce debt. By mid-afternoon, the stock had slipped 1.37% to €22.32, reflecting the subdued mood.

Behind the share price weakness, however, lies a solid operational picture. Vonovia’s first-quarter results showed adjusted EBITDA rising 1.4% to €711.6 million, with the core letting business climbing 6.3% to roughly €630 million. Organic rent growth reached 4.0%, pushing the average monthly rent to €8.46 per square metre – an achievement made more notable by the fact that the company sold about 4,000 units during the period. The smaller but fast-growing “value-add” segment, which bundles services such as trades and energy, saw its EBITDA surge by more than 30% to around €50 million.

Management held its full-year guidance steady: adjusted EBITDA of €2.95 billion to €3.05 billion, and adjusted earnings before tax of €1.9 billion to €2.0 billion. Debt reduction continues, with the loan-to-value ratio standing at 45.1% and a target of roughly 40% by 2028.

Even as investors push for faster deleveraging, Vonovia does not shy away from long-term investments. On the sidelines of the AGM, the group announced the completion of an energy-efficiency modernisation in Essen-Stoppenberg. The €1.5 million project, covering 60 apartments (new windows, doors, insulation), is expected to cut carbon dioxide emissions by 52 tonnes annually – a small step toward the 2045 climate-neutrality target.

The dividend, meanwhile, remains a key reason to hold the stock. The proposed payout of €1.25 per share – with today as the record date – translates into a yield of about 5.7% at the current share price, among the highest in the DAX. The vote on the distribution was still awaited later in the day.

Goldman Sachs argues the shares are deeply undervalued. In a recent note, the bank raised its price target to €31.80 and kept a “Buy” rating, implying potential upside of more than 40% from the €22.47 level. Yet the stock remains about 11% below its 200-day moving average, underscoring how far the interest-rate headwinds have weighed on Vonovia’s valuation.

The next concrete test comes on August 5, 2026, when the company publishes its half-year report. That will show how much further Vonovia has progressed on debt reduction – and whether the operational momentum can finally start closing the gap with the share price.