Cautious Hold Rating for Unibail Rodamco Westfield Amid Strategic Updates and High Leverage Risks

Unibail Rodamco Westfield (1BR1 – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst Bart Gysens from Morgan Stanley upgraded the rating on the stock to a Hold and gave it a €85.00 price target.

Bart Gysens has given his Hold rating due to a combination of factors surrounding Unibail Rodamco Westfield’s recent strategic updates and financial position. The company has outlined a new plan with specific guidance on capital expenditures, debt costs, and payout ratios, which has led to an increase in the expected dividends for 2025-2027. However, this is offset by a slight decrease in earnings per share projections and a reduction in net asset value per share due to lower retained earnings.
Despite Unibail’s efforts to reduce financial leverage, the company’s balance sheet remains heavily leveraged, which poses risks given the uncertain macroeconomic environment. While the stock offers an attractive dividend yield and a low price-to-earnings ratio, the company’s mixed track record in capital allocation and execution tempers enthusiasm. Consequently, Gysens has set a price target of €85, reflecting a cautious stance amidst the potential for operational challenges and high leverage, which could limit the company’s ability to withstand adverse conditions.

In another report released on May 15, Berenberg Bank also maintained a Hold rating on the stock with a €82.00 price target.