Broker tips: Workspace, Zigup, Great Portland Estates

(Sharecast News) - Barclays downgraded Workspace on Friday to 'underweight' from 'overweight' and slashed the price target to 310p from 450p as it said the turnaround is going to take longer than expected and it forecasts a "material" earnings rebasing over FY27/28.

The bank noted that alongside its fourth-quarter trading update, Workspace issued a profit warning flagging a substantial step down in earnings in FY27, reflecting a deteriorating earnings base and a challenged operating business that will take longer to fix than Barclays originally expected.

Management highlighted a lower opening rent roll and continued pricing pressure across the portfolio, coupled with higher interest costs, reduced capitalised interest and rising operating expenses which are expected to hit FY27 and likely beyond, Barclays said.

"The impact is compounded by the group's disposal programme targeting higher yielding assets, and the group is considering additional disposals ahead of the £200m identified," it said. "As a consequence, we now don't expect earnings to trough until FY28E (circa 34% below FY25 earnings and circa 28% below our prior forecast) and struggle to see how the shares outperform given this outlook."

Analysts at Berenberg initiated coverage on commercial vehicle rental provider Zigup with a 550p target price and a 'buy' rating, stating the group was "in the driving seat" as it approaches a "major" inflection point.

Berenberg said Zigup, formerly known as Redde Northgate, has built a fully integrated mobility platform, providing a comprehensive solution across the full vehicle lifecycle for customers in the UK & Ireland and Spain.

The German bank stated Zigup was at "a major cash-generation inflection point", with the firm targeting £200m by FY28. It noted that financial momentum was driven by its "nationwide, unique, integrated platform", which provides "a key strategic advantage" for capturing significant market share in a fragmented industry.

"Zigup is approaching an inflection point in cash generation, driven by EBITDA growth, normalising fleet replacement capex, and the exit from a heavy investment cycle, all converging to drive a step-change in potential FCF," said Berenberg.

"Combined with £20m of restructuring savings, the business is targeting cash generation of £200m by FY28. This opens up compelling capital allocation opportunities for further investment in growth or additional shareholder returns through buybacks, in addition to a favourable dividend yield (c6.7% in FY26E)."

Berenberg added that Zigup currently trades on a FY26 price-to-earnings ratio of 7.6x, or 9.5x enterprise value to EBIT. Its 550p price target also implies roughly 35% upside to its current share price.

Shore Capital has kept a 'buy' rating on workplace and retail space investor Great Portland Estates, saying that the latest property market data was "very supportive" of the positive investment case for the stock.

The broker said that recent data from estate agents Savills and CBRE provides "further optimism" about the outlook for London's office market.

"Savills reported 2.2m sq ft of office take-up in central London during Q1 2026 - an increase of +6% vs Q1 2025 with demand for prime office stock reaching a new record high," Shore Capital said, noting that recent leasing activity was being driven by fast-growing tech and AI companies.

Great Portland's latest financial year ended 31 March was a record leasing year for the company, with "continued strong occupier demand for high quality office space in London's West End", Shore Capital said. The company also managed to sell £490m of assets, as it continues to recycle capital from mature assets into its development pipeline.

"We are looking ahead with optimism to GPE reporting results for FY26F on 21st May with the latest market data providing further strong reassurance that, despite the current geopolitical uncertainty, occupier demand for high quality office space in London's core West End remains undiminished," the broker said.