On Wednesday, Jefferies upgraded shares of Gecina SA (GFC:FP) (OTC: GECFF), a French real estate investment trust, from Hold to Buy, increasing the price target to €120 from €101. This adjustment reflects a positive shift in the firm's perspective on Gecina's future financial performance.
The investment firm acknowledged Gecina's robust and consistent operating performance, noting that the company's asset values have reached a turning point. This development has allowed Gecina to enhance its development pipeline, supported by a relatively low 37.8% EPRA Loan-to-Value (LTV) ratio.
Jefferies forecasts a significant increase in Gecina's Recurring Earnings Per Share (EPS), projecting a 17% growth from 2023 to 2027, estimating the EPS to reach €7.04. The firm's optimism is based on the expectation that Gecina will continue to surpass its office sector peers.
The upgraded rating and price target are also influenced by Gecina's appealing valuation metrics. Jefferies highlighted the company's price to Net Tangible Assets per share (P/NTAps) of 0.6x and the price to Funds From Operations for 2024 (P/FFO24e) of 14x, which they consider more attractive compared to the industry standards.
Gecina, with its diversified portfolio that includes office, residential, and other real estate assets, is poised to benefit from these favorable conditions as per Jefferies' analysis. The firm's revised outlook suggests confidence in Gecina's strategic initiatives and financial health moving forward.
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