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Segro Plc (Reit) (GB:SGRO)
:SGRO

Segro plc (REIT) (SGRO) AI Stock Analysis

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Segro plc (REIT)

(LSE:SGRO)

Rating:71Outperform
Price Target:
743.00p
▲(11.73%Upside)
Segro plc's overall score is driven by a solid financial foundation and strategic growth initiatives, as seen in recent corporate events. The stock's valuation is attractive, offering a good P/E ratio and robust dividend yield. However, technical indicators suggest caution, as the stock is trading below key moving averages. The company's ability to maintain its strong balance sheet and generate consistent cash flow supports its potential for future stability.
Positive Factors
Financial Position
The balance sheet is well positioned with £2.2bn of cash and undrawn debt available, and an LTV of 29%.
Joint Venture
During the quarter, the Company announced a 1bn JV with Pure DC to develop its first fully-fitted data centre.
Rental Uplift
SEGRO continues to capture reversion, with rental uplift in the quarter on review and renewal some 25% ahead of previous rents.
Negative Factors
Market Performance
SEGRO shares are broadly flat YTD, having participated in the sector-wide sell-off.
Occupier Market
The occupier market has slowed with take-up back to pre-pandemic levels and supply constant, leading to a fall in net absorption.
Pre-letting Rate
The rate of pre-letting has slowed to 53% from a high of 75%, indicating a decrease in pre-committed rental agreements.

Segro plc (REIT) (SGRO) vs. iShares MSCI United Kingdom ETF (EWC)

Segro plc (REIT) Business Overview & Revenue Model

Company DescriptionSEGRO is a UK Real Estate Investment Trust (REIT), and a leading owner, manager and developer of modern warehouses and light industrial property. It owns or manages 8.1 million square metres of space (88 million square feet) valued at £13.3 billion serving customers from a wide range of industry sectors. Its properties are located in and around major cities and at key transportation hubs in the UK and in seven other European countries.
How the Company Makes MoneySegro plc generates revenue primarily through leasing its industrial and logistics properties to a variety of tenants. The company's business model is centered on acquiring, developing, and managing high-quality assets that are strategically located in proximity to major transportation hubs and urban centers. Key revenue streams include rental income from long-term leases, which provide a stable and predictable cash flow. Additionally, Segro engages in property development, adding value through the construction of new facilities tailored to tenant specifications, which can further enhance rental yields and attract new clients. The company's growth is supported by significant partnerships with major logistics and retail companies, as well as its ability to leverage its expertise in property management to optimize asset performance and drive tenant satisfaction.

Segro plc (REIT) Financial Statement Overview

Summary
Segro plc presents a mixed but generally stable financial position. The company has strong gross margins but displays volatility in profitability. The balance sheet is robust with strong equity and moderate leverage, while the cash flow statement shows consistent cash generation. Despite revenue and profitability fluctuations, Segro plc maintains a solid financial footing, with potential for further stability.
Income Statement
65
Positive
Segro plc has experienced a mixed trajectory in recent years. The gross profit margin is strong at approximately 78.7% for 2024, indicating efficient cost management. However, there has been significant volatility in EBIT and net income, particularly in 2023, where both metrics were negative. Revenue has shown fluctuating growth patterns, with a notable decrease in 2024 compared to 2023. The company's ability to recover from previous losses in net income is promising, but the inconsistencies suggest potential risks in financial performance.
Balance Sheet
70
Positive
The balance sheet of Segro plc demonstrates a solid equity base, with an equity ratio of 68.6% in 2024, indicating a strong financial foundation. The debt-to-equity ratio is relatively moderate at 0.39, which shows a reasonable level of leverage. Return on Equity (ROE) improved significantly in 2024 after a negative performance in 2023, reflecting a return to profitability. While the balance sheet is robust, attention should be paid to the fluctuations in total liabilities and equity over time.
Cash Flow
75
Positive
Segro plc's cash flow statement shows positive trends, with a strong free cash flow generation in 2024 and a solid operating cash flow to net income ratio. The company has maintained a positive free cash flow, indicating its ability to generate cash after capital expenditures. Although there was a decline in free cash flow in 2024 compared to the previous year, the company has shown resilience in maintaining sufficient cash generation capabilities.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
675.00M749.00M669.00M546.00M431.70M
Gross Profit
531.00M588.00M451.00M401.00M323.80M
EBIT
703.00M-180.00M197.00M265.00M303.20M
EBITDA
763.00M-134.00M-1.88B270.00M280.00M
Net Income Common Stockholders
594.00M-253.00M-1.93B4.06B1.43B
Balance SheetCash, Cash Equivalents and Short-Term Investments
292.00M376.00M162.00M45.00M89.00M
Total Assets
17.57B17.31B17.35B17.78B12.67B
Total Debt
4.68B5.42B4.96B3.48B2.50B
Net Debt
4.38B5.11B4.80B3.44B2.41B
Total Liabilities
5.53B6.40B5.97B4.35B3.00B
Stockholders Equity
12.05B10.90B11.37B13.44B9.66B
Cash FlowFree Cash Flow
306.00M402.00M204.00M304.00M194.40M
Operating Cash Flow
330.00M431.00M213.00M311.00M199.30M
Investing Cash Flow
-369.00M-526.00M-1.25B-1.28B-1.11B
Financing Cash Flow
26.00M309.00M1.12B930.00M862.50M

Segro plc (REIT) Technical Analysis

Technical Analysis Sentiment
Negative
Last Price665.00
Price Trends
50DMA
671.11
Negative
100DMA
676.85
Negative
200DMA
734.42
Negative
Market Momentum
MACD
-3.35
Positive
RSI
48.13
Neutral
STOCH
45.63
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SGRO, the sentiment is Negative. The current price of 665 is below the 20-day moving average (MA) of 670.93, below the 50-day MA of 671.11, and below the 200-day MA of 734.42, indicating a bearish trend. The MACD of -3.35 indicates Positive momentum. The RSI at 48.13 is Neutral, neither overbought nor oversold. The STOCH value of 45.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SGRO.

Segro plc (REIT) Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
83
Outperform
£3.49B7.1411.28%5.45%38.97%417.46%
GBLMP
82
Outperform
£4.10B11.578.66%5.63%95.26%
73
Outperform
£717.17M40.162.39%4.87%4.41%
71
Outperform
£8.99B14.885.18%4.48%-9.88%
68
Neutral
£3.87B21.273.17%5.98%-30.83%
60
Neutral
$2.76B10.590.51%8507.90%5.51%-19.44%
47
Neutral
£4.62B11.696.13%6.55%-1.73%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:SGRO
Segro plc (REIT)
665.00
-200.11
-23.13%
GB:BLND
British Land Company plc
387.40
-11.61
-2.91%
GB:LAND
Land Securities Group plc REIT
623.00
17.83
2.95%
GB:LMP
LondonMetric Property
199.20
7.92
4.14%
GB:SHED
Urban Logistics REIT plc
156.00
45.34
40.97%
GB:BBOX
Tritax Big Box REIT
141.90
-8.30
-5.53%

Segro plc (REIT) Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
SEGRO plc Awards Shares to Directors Under Incentive Plan
Positive
May 12, 2025

SEGRO plc announced that its directors, David Sleath and Soumen Das, have been awarded free shares under the company’s Share Incentive Plan (SIP), which is an HMRC-approved share plan for eligible employees. This move reflects SEGRO’s commitment to aligning the interests of its leadership with those of its shareholders, potentially enhancing stakeholder confidence and reinforcing the company’s market position.

The most recent analyst rating on (GB:SGRO) stock is a Buy with a £1045.00 price target. To see the full list of analyst forecasts on Segro plc (REIT) stock, see the GB:SGRO Stock Forecast page.

Shareholder MeetingsDividendsBusiness Operations and StrategyFinancial Disclosures
SEGRO plc Announces Successful AGM Resolutions
Positive
Apr 30, 2025

SEGRO plc announced the successful passing of all resolutions at its Annual General Meeting, including the approval of financial statements, a final dividend, and the re-election of several directors. These resolutions reflect strong shareholder support and are expected to positively impact the company’s governance and financial strategy, reinforcing its position in the real estate market.

Executive/Board ChangesBusiness Operations and Strategy
SEGRO CFO Soumen Das to Retire, Successor Search Underway
Neutral
Apr 30, 2025

SEGRO plc announced the upcoming retirement of Soumen Das, its Chief Financial Officer and Executive Director, who will remain with the company until the end of the year to ensure a smooth transition. Das has significantly contributed to SEGRO’s growth, helping it become the largest REIT in Europe and one of the UK’s largest listed companies. His departure marks a notable change in the company’s leadership, with a successor yet to be named. This transition may impact SEGRO’s operations and strategic initiatives, given Das’s pivotal role in the company’s success.

Business Operations and StrategyFinancial Disclosures
SEGRO Reports Strong Start to 2025 with Data Center Expansion
Positive
Apr 30, 2025

SEGRO plc reported a strong start to 2025, driven by robust performance from its existing portfolio and growth in its development pipeline. The company announced a £1 billion joint venture to develop its first fully fitted data center in West London, marking a significant step in its data center strategy. SEGRO continues to benefit from long-term demand for modern warehouses and data centers, with limited supply in its key markets. The company achieved a £13 million increase in headline rent, with high customer retention and stable occupancy rates. SEGRO’s balance sheet remains strong, with a low loan-to-value ratio and significant liquidity to support further growth opportunities.

Executive/Board ChangesBusiness Operations and Strategy
SEGRO plc Announces Deferred Share Bonus Awards for 2024
Positive
Apr 29, 2025

SEGRO plc announced the granting of awards to its Directors and Persons Discharging Managerial Responsibilities (PDMRs) under its Deferred Share Bonus Plan (DSBP) for the 2024 annual bonus. Additionally, shares were released under the DSBP award from 2021. These transactions reflect SEGRO’s ongoing commitment to aligning management incentives with shareholder interests, potentially impacting the company’s operational focus and market perception positively.

Business Operations and StrategyRegulatory Filings and Compliance
T. Rowe Price Increases Stake in SEGRO plc
Positive
Apr 15, 2025

T. Rowe Price Associates, Inc., a US-based investment firm, has crossed a significant threshold in its holdings of SEGRO plc, now owning 5.131196% of the voting rights. This acquisition of voting rights indicates a strategic investment move by T. Rowe Price, potentially impacting SEGRO’s shareholder dynamics and signaling confidence in the company’s market position and future prospects.

Business Operations and Strategy
BlackRock Increases Stake in SEGRO plc
Neutral
Apr 15, 2025

BlackRock, Inc., a major shareholder in SEGRO plc, has increased its voting rights in the company to 10.34%, up from a previous position of 10.27%. This acquisition of additional voting rights by BlackRock signifies a strengthened influence in SEGRO’s strategic decisions, potentially impacting the company’s future operations and market positioning.

Regulatory Filings and Compliance
Segro plc Announces Change in Major Holdings by BlackRock
Neutral
Apr 7, 2025

Segro plc, a UK-based Real Estate Investment Trust (REIT), has announced a change in major holdings, with BlackRock, Inc. adjusting its voting rights in the company. The notification indicates that BlackRock’s total voting rights in Segro have decreased slightly from 10.53% to 10.27%, reflecting a minor adjustment in their financial instruments and direct voting rights.

Regulatory Filings and Compliance
SEGRO plc Announces Total Voting Rights for March 2025
Neutral
Mar 31, 2025

SEGRO plc has announced its total issued ordinary share capital as of 31 March 2025, which consists of 1,353,382,087 ordinary shares with one voting right per share. This figure is crucial for shareholders to determine their notification obligations under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules, impacting how they manage their interests in the company.

Executive/Board ChangesBusiness Operations and Strategy
SEGRO plc Concludes LTIP Share Release for Executive Directors
Neutral
Mar 28, 2025

SEGRO plc announced the release of shares to its Executive Directors under the Long Term Incentive Plan (LTIP) from 2020, marking the end of a two-year holding period. The shares were initially granted in 2020 and vested fully after meeting performance conditions by 2023, with the final release occurring on March 26, 2025. This release involved the acquisition and subsequent sale of shares to meet tax obligations, with transactions conducted on the London Stock Exchange. This move reflects SEGRO’s ongoing commitment to aligning executive compensation with company performance, potentially impacting shareholder value and executive motivation.

M&A TransactionsBusiness Operations and Strategy
SEGRO’s SELP Completes €470 Million Acquisition of Logistics Assets
Positive
Mar 6, 2025

SEGRO, acting as a venture adviser to the SEGRO European Logistics Partnership (SELP), has completed the acquisition of six logistics assets from Titanium Ruth Holdco Limited, valued at €470 million. These assets, located in key logistics hubs in the Netherlands and Germany, cover 370,000 sq m of fully-leased space, generating €24 million in rent with a net initial yield of 5.0%. This acquisition strengthens SELP’s position in the European logistics market, enhancing its portfolio and revenue potential.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.