Stifel Nicolaus analyst Denese Newton maintained a Hold rating on LEG Immobilien (0QC9 – Research Report) today and set a price target of €80.00.
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Denese Newton’s rating is based on a combination of factors affecting LEG Immobilien’s current financial and market position. The company has shown growth in its Q1 results, primarily driven by a 3% like-for-like rental increase and the integration of BCP units, which are now fully consolidated. However, the overall market performance has been less favorable, with LEG shares declining by approximately 9% year-to-date, underperforming the broader European EPRA index.
Despite the strong supply and demand characteristics of the asset class, regulatory challenges and rising refinancing costs have created a challenging environment for significant outperformance in the near term. The company’s balance sheet shows an increase in loan-to-value ratio, which now stands at 48.4%, above the company’s target of 45%. Additionally, while the adjusted EBITDA has grown by about 10% compared to the previous year, uncertainties in the bond market and infrastructure announcements have contributed to the cautious outlook. These elements combined lead to the Hold rating being maintained.