16th Feb 2024 11:52
(Alliance News) - Analysts have agreed with Segro that the company is well-placed for growth in 2024 beyond, with the property developer's compelling 2023 results offering a good case for investment.
In its annual results, published on Friday, Segro reported GBP749 million in revenue, GBP409 million in pretax profit, 32.7p in adjusted earnings per share, and a full-year dividend of 27.8p. All these figures were ahead of Segro's 2022 results.
The company also boasted of its "exceptional land bank" and 623,900 square metre development pipeline, and said that it plans to increase the GBP639 million generated in passing rent by more than 50% over the next three years.
Shares in Segro are currently trading at 843.20 pence per share, up 1.2% in London on Friday morning..
Shore Capital analysts urge investors to take advantage of a potential discount in the company's share price, after Segro was "a touch ahead" of the investment group's forecasts for pretax profit, earnings per share and dividend.
Shore pointed to Segro's landbank, which holds the potential for over GBP390 million in additional rental income, and its healthy balance sheet to demonstrate the investment case.
As the investment market for industrial and logistics assets bounces back, especially in the UK, Shore says that Segro will be able to take advantage of its "considerable scale and leading positions" in many markets of the wider real estate investment trust sector.
A slight lull in the company's share price in February offers an opportune moment, Shore said, giving the stock a "buy" rating at 833p and recommending that investors move quick.
Liberum was similarly bullish, pointing to the company's healthy financial position.
With access to GBP1.9 billion of available liquidity at a loan-to-value ratio of 34%, Liberum considers Segro's balance sheet "one of the strongest...in the UK real estate investment trust sector".
With "superior growth prospects" to the rest of the UK REIT sector, Liberum gives Segro a "buy" rating alongside a price target of 925p.
UBS analysts, whose forecasts for earnings per share were also trumped by Segro, gives the company a "buy" rating and a price target of 950p.
Jeffries also gave Segro a "buy" rating, and set the company a price target 1,046p.
By Hugh Cameron, Alliance News reporter
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