JPMorgan sees upside at Land Securities, stays at 'buy'

1st Jul 2015 11:12

JPMorgan Cazenove has recommended investors buy shares of Land Securities, picking the stock out as one of its key 'overweights' in the UK property sector."The sell off in UK property stocks represents an opportunity and we would buy Land Securities, which offers 32% potential upside while trading at a 18% discount to T+1 NAV of 1,472p," the bank said.JPMorgan has kept a 1,600p target price for the shares; this incorporates 110p of profit from development but the bank said this could rise to 200p under its bull-case scenario.Furthermore, after accounting for an increase in UK Gilt yields, it still sees upside potential in the stock."We also studied the last 37 times UK gilts have risen above 50 basis points and believe there is little to fear. In the 3 months before the gilt yield starts rising, UK property stocks 'only' underperform the FTSE 100 by 1%. In the 3 months after the gilt stabilises, UK property stocks outperform by 3.4%," JPMorgan said.Land Securities was trading 1.7% higher at 1,224p by 11:43 on Wednesday.JPMorgan has also reiterated an 'overweight' rating on LondonMetric and Helical Bar.