![]() ![]() 'Radical change in political leadership' John Cahill, led analyst of the Stifel note, welcomed the U.K. "The shares will likely be volatile in the short term, but at the current valuation, the shares represent a deep value opportunity for investors willing to endure a bumpy ride, in our opinion," they said. The company reported a loan-to-value of just 24% in its most recent filing, which Stifel said will give it plenty of room to expand when property asset prices are declining. The research note said that while Great Portland Estates will also face headwinds from rising interest rates, its "conservatively financed" balance sheet will allow it to emerge stronger than its peers. Shares in the company are expected to rise by 10% by the end of the year, according to Stifel. Great Portland Estates Despite suffering a 65% cut in its price target, the FTSE 250 stock still has a buy rating from Stifel. As a result, shares in the company have fallen by 35% this year. Stifel's note to clients said British Land was unlikely to be upgraded in the short-term until there's more clarity on the change in property values. The analysts expect the London office space property sector, where British Land has significant investments, to lose value this year, as well as 2023. British Land Stifel said its previous positive outlook for the FTSE 100 company had reversed due to the significantly deteriorating macroeconomic conditions prompting a rating downgrade. Shares in the company have already fallen by 42% this year and are now trading at 3.5% below Stifel's price target. The analysts said that while the company might benefit from weaker sterling, it won't be immune to rising interest rates. Shaftesbury The West End property investment company saw the biggest cut in price target in percentage terms from Stifel Europe. ![]() Hammerson, the owner of multiple shopping malls, has similarly seen its bond yields touch 10.7% from 2.6% last year. ![]() One of the sector's leading companies, SEGRO, has seen the interest rate on its bonds rise to 6.4% from 1.2% just over a year ago. In the meantime, Stifel believes that corporate bond yields, which are priced in real-time, are good indicators of future pressures on property assets. The report noted that the stock prices of property companies had yet to factor in the impact of rising interest rates, due to a lag between property valuations and the disclosure of these valuations. "The gamble to generate growth via lower taxes has sent shock waves through the financial markets, such that the 10-year gilt yield is up over 100bps in two weeks, and 230bps in two months," they said. SOURCE INSIGHT CRACK DRIVER30 report titled "In Liz we're Trussed," the analysts said interest rates, driven by government policy, were the key driver for their outlook on the property sector. Here are the five stocks that saw the biggest cuts to their price targets by Stifel, along with their ratings: In a Sept. As a result, investment research group Stifel Europe made "significant" downgrades across the sector. This saw British property stocks become less attractive to investors, who turned to government bonds as a higher-yielding - and safer - bets. government bonds to their highest levels in over a decade. Finance Minister Kwasi Kwarteng sent yields on U.K. Earlier this month, expansive tax cuts announced by U.K. The U.K.'s property market has been thrown into turmoil after political turmoil saw borrowing costs in the country soar. ![]()
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