On Wednesday, CFRA raised its rating on Gecina SA (GFC:FP) (OTC: GECFF) to Strong Buy from Buy, while keeping its price target unchanged at EUR119.00. The upgrade follows Gecina's reported first-half 2024 recurrent net income per share (RNIPS) of EUR3.18, which marks an 8.4% increase year-over-year and surpasses the consensus estimate of EUR2.66.
The company's performance benefited from a notable rise in gross rental income, growing by 3.1% from the previous year, and a slight improvement in occupancy rates, which ascended by 20 basis points year-over-year to 94.1%. Additionally, Gecina experienced a robust rental increase of 16% in the first quarter, with a significant 30% improvement in Paris City.
Gecina's management has confirmed its RNIPS guidance for the full year, projecting a growth between 5.5% and 6.5%, with figures ranging from EUR6.35 to EUR6.40. This outlook aligns with the company's solid performance in its office and residential rental segments.
The analyst's decision to upgrade the stock is also influenced by the broader economic environment, particularly the recent interest rate cut by the European Central Bank. Another anticipated cut in the second half of 2024 is expected to benefit Gecina by reducing interest costs and enhancing property valuations.
CFRA maintains its forecast for the company's funds from operations (FFO) at EUR6.36 for 2024 and EUR6.43 for 2025, suggesting a stable financial outlook for Gecina in the coming years.
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