Prime US REIT, the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst Darren Chan from Phillip Securities maintained a Buy rating on the stock and has a $0.32 price target.
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Darren Chan has given his Buy rating due to a combination of factors including rising payout ratios supported by clearer cash flow visibility and strengthening portfolio metrics. Despite a dip in FY25 revenue and NPI from asset divestment and lease expiries, distributions were broadly in line with expectations and are now underpinned by a commitment to distribute at least 65% of income, which translates into a compelling forward yield at current prices.
The trust is also benefiting from better leasing traction, with sizeable new leases signed at positive rental reversions, higher occupancy, and a lengthened WALE that collectively enhance income stability. Together with a portfolio valuation uplift driven by firmer contracted cash flows and cap-rate compression, and the units trading at a deep discount to NAV, Chan sees an attractive total return opportunity as the portfolio stabilises and dividend growth resumes.
In another report released today, DBS also maintained a Buy rating on the stock with a $0.33 price target.