On Thursday, Jefferies adjusted its financial outlook for Link REIT (823:HK) (OTC: LKREF), reducing the price target to HK$41.00 from the previous HK$43.00, while retaining a Buy rating on the stock.
The adjustment comes ahead of the company's report scheduled for May 29, 2024. The firm anticipates that the potential downside risk to the Distribution Per Share (DPS) could be a central issue of discussion.
The forecast for the fiscal years 2024-2025 sets the Distribution Per Unit (DPU) at HK$2.53. This projection is based on the expectation that the ramp-up of new assets and share buybacks will offset the impact of rising interest rates, despite a flat reversion rate in Hong Kong. The firm acknowledges that growth poses a challenge for Link REIT.
Link REIT is currently trading at a yield of 7.2%, which, according to Jefferies, suggests that market sentiment has already factored in a significant amount of negative expectations. This yield reflects investor returns relative to the stock's price, indicating how much income the investment generates.
The real estate investment trust, which is known for its portfolio of retail and office properties, will provide more details on its performance and strategy in the upcoming report. Investors often look to such announcements for insights into a company's financial health and future prospects.
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