Supermarket Income REIT Plc (SUPR – Research Report), the Real Estate sector company, was revisited by a Wall Street analyst today. Analyst John Cahill from Stifel Nicolaus reiterated a Buy rating on the stock and has a p90.00 price target.
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John Cahill has given his Buy rating due to a combination of factors that highlight the positive outlook for Supermarket Income REIT Plc. The company has recently completed strategic changes, most notably the internalization of its management function, which is expected to result in significant operational cost savings of £6 million annually. This move is anticipated to provide greater certainty in generating a progressive dividend fully covered by earnings, even in a normalized interest rate environment.
Furthermore, the company’s shares have shown a positive performance, rising by 8.5% since the internalization announcement, outperforming the EPRA UK REIT Index. The reduction in costs is expected to place the company’s EPRA cost ratio among the lowest in the sector. Additionally, the prospective dividend yield of over 8%, which is well above the REIT average, represents a strong value proposition. Despite not assuming further acquisitions and adjusting for changes in rental income and interest rates, the reduced administrative costs are expected to maintain a fully covered dividend, reinforcing the Buy rating.
Based on the recent corporate insider activity of 8 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of SUPR in relation to earlier this year.