Segro plc: Hold Rating Amid Strong Rental Growth and Market Uncertainties

Denese Newton, an analyst from Stifel Nicolaus, maintained the Hold rating on Segro plc (REIT) (SGRO – Research Report). The associated price target remains the same with p740.00.

Denese Newton’s rating is based on a combination of factors influencing Segro plc’s current market position. The company has shown a strong ability to capture rental reversion, with rental increases significantly outpacing previous rates. However, the vacancy rate remains at 6%, and there has been a noticeable slowdown in pre-letting activities, which could indicate a cautious approach from customers.
Despite the company’s well-positioned balance sheet and strategic developments, including a joint venture in data centers, external factors such as the potential impact of tariffs and a softening occupier market present uncertainties. These challenges, coupled with the recent volatility in share prices and a trading discount to the estimated net tangible assets, suggest that Segro’s shares may not outperform in the near term, justifying the Hold rating.

According to TipRanks, Newton is a 3-star analyst with an average return of 3.5% and a 64.00% success rate.