(News Bulletin 247) – Invest Securities is adjusting its recommendation on the Foncière Lyonnaise (SFL) share, moving from ‘bring’ to ‘sell’, with a significantly reduced price target, from 91.8 to 60.6 euros.
The analyst highlights a “very good operational” in the 1st quarter, with in particular an organic growth in rents of +7.5% in a context of an almost perfect occupancy rate (99.4%), as well as an important pipeline of projects (900ME) supported by a good debt profile.
‘The RNR should show strong increases over the next two years (+8.1% in 2023 and +11.8% in 2024)’, Invest judges.
However, the analysis office considers that the valuation of the title seems ‘too high’, even if SFL is one of the rare real estate companies offering excellent guarantees in terms of growth of its income.
In addition, ‘the company will have to deal with a portfolio highly exposed to the rise in capitalization rates: its NAV could reach its low point in 2024 (-34% vs 2022)’. Finally, Invest notes that since Colonial’s takeover offer in August 2021, ‘the title has suffered from almost non-existent liquidity (1.6% free float)’.
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