Weekly Reports | Jun 21 2024
Broker Rating Changes (Post Thursday Last Week)
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CHARTER HALL SOCIAL INFRASTRUCTURE REIT ((CQE)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Within Jarden's coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for Charter Hall Social Infrastructure REIT is decreased to $2.75 from $3.05 and the rating upgraded to Neutral from Underweight.
While this REIT offers one of the better revenue growth stories in the sector, the broker sees limited near-term earnings growth.
DEXUS ((DXS)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Within Jarden's coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for Dexus is decreased to $7.60 from $7.90 and the rating upgraded to Neutral from Underweight. While most bad news is already reflected in the share price, the broker sees no evidence of sustainable FFO growth.
GPT GROUP ((GPT)) Upgrade to Overweight from Underweight by Jarden.B/H/S: 0/0/0
Within Jarden's coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for GPT Group is increased to $4.85 from $4.70 and the rating upgraded to Overweight from Underweight with shares trading at a discount to the broker's sum-of-the-parts valuation.
LIFESTYLE COMMUNITIES LIMITED ((LIC)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Within Jarden's coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for Lifestyle Communities is decreased to $15 from $17 and the rating upgraded to Buy from Overweight as recent share price weakness looks overdone, in the broker's opinion.
MIRVAC GROUP ((MGR)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Within Jarden's coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The broker's target for Mirvac Group is decreased to $2.20 from $2.25 and the rating upgraded to Overweight from Neutral as the share price has significantly underperformed the sector over the past six months.
STOCKLAND ((SGP)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Within Jarden's coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for Stockland is increased to $5.45 from $5.05 and the rating upgraded to Buy from Overweight.
Jarden believes residential momentum will improve in anticipation of rate cuts, while the acquisition of Lendlease Group's ((LLC) MPC business is expected to drive EPS growth.
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