On Thursday, Nomura/Instinet revised its stance on Longfor Group Holdings Ltd (960:HK) (OTC: LNGPF), downgrading the stock from "Buy" to "Neutral." The move came alongside a reduction in the price target from HK$11.80 to HK$9.80. The adjustment reflects a reassessment of the company's earnings forecasts and net asset value (NAV) estimates for the fiscal years 2024 to 2026.
Stifel analysts cited a decrease in their earnings estimates for Longfor by 4-24% for the fiscal years 2024 through 2026. Additionally, they have revised the forward-12-month NAV estimate for Longfor from HK$29.60 to HK$24.40. The new target price is based on a consistent forward-12-month target NAV discount of 60%, leading to the reduced figure of HK$9.80, which suggests a potential downside of 3%.
The downgrade to "Neutral" was justified by the analysts' view that there are limited short-term catalysts that could drive the share price higher. They noted that Longfor's stock is currently trading at multiples of 5.1 times the forecasted FY25 price-to-earnings (P/E) and 0.3 times the FY24 price-to-book (P/B) ratios. According to Nomura/Instinet, these valuation levels are deemed fair when considering the company's modest growth trend.
Longfor Group Holdings Ltd, a property development and investment company, has been evaluated in the context of a challenging real estate market. The reassessment by Nomura/Instinet reflects the firm's approach to providing investors with updated guidance based on the latest financial projections and market conditions.
Investors and market watchers will be keeping an eye on Longfor's performance and any potential market catalysts that could influence the company's share price in the future. The updated analysis by Nomura/Instinet serves as a current snapshot of their expectations for the company's financial trajectory.
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