Berenberg slightly lowers target price on CLS Holdings

6th Apr 2023 09:16

(Sharecast News) - Analysts at Berenberg slightly lowered their target price on property investment company CLS Holdings from 205.0p to 190.0p on Thursday, stating it was taking "a conservative view" on future valuation impacts and occupancy.

Berenberg said CLS Holdings' full-year results evidenced both "the resilience and quality" of its pan-European portfolio, with the group achieving earnings growth, dividend growth, and "a better valuation performance" versus its London office peers despite market uncertainty.

"This came despite CLS's prevailing 32% relative valuation discount," noted Berenberg. "With full-year 2022 results broadly in line with our above-consensus forecasts, we roll forward our model, although we do take a conservative view on future valuation impacts and occupancy."

Beyond this, Berenberg, which has a 'hold' rating on the stock, also included increased asset disposal assumptions, reflecting management guidance and a need for the company to reduce its leverage to target levels.

"With a resilient portfolio and significant cash forecast to be generated from asset disposals, there remains scope for reinvestment in either share buybacks or attractively-priced assets. With the shares yielding 6.2%, we believe that investors are being paid handsomely to wait for a re-rating," said Berenberg.

Reporting by Iain Gilbert at Sharecast.com