(Sharecast News) - Analysts at JPMorgan slashed their target price on real estate investment trust Hammerson from 185.0p to 30.0p on Wednesday, stating the group appeared to be "two to three years away" from pursuing its value-enhancing strategy.
JPMorgan stated that in order for Hammerson to implement its strategy, confidence in UK shopping centre values were required, as were disposals and "sustainable" rental levels.
At current levels, JPM said the shares "certainly" represented option value on a positive outcome, but said it still believes that much remains ahead of the company.
The analysts came to their new target price after they adjusted their model to incorporate proceeds from Hammerson's latest rights issue and disposal, as well as further asset disposals of £500.0m per annum in the next four years, the stock's higher share count and lower capital values for UK flagships.
"In our view, new CEO Rita-Rose Gagné has plenty of time to evaluate the next steps. As laid out above, the bottom in market asset values, disposals and rent rebasements are likely to take 24-36 months minimum to achieve and we see these factors driving the discount direction going forward," concluded JPM, which also maintained its 'neutral' rating on the stock.
Hammerson (HMSO)3 May 2024 13:37