Jarden Cuts Valuations for Australian REITs as Rates Rise

Dow Jones08:31

0031 GMT - Jarden swings the ax at its price targets for Australian REITs after real interest rates increased to levels not seen since 2009. Its valuations now factor in a higher cost of capital. Jarden moves its cost of equity up to 10.5%, from 9.7%, as it lifts its risk-free rates to 5.1%, from 4.4%. Analyst Tom Bodor also increases cap rate assumptions by 30 bps to 6.2%. "Despite moving our target prices 11% lower, we still see 16% total return (12% upside to target prices and 4% dividend yield, including Goodman)," Jarden says. Among target changes, GPT's is cut 10% to A$5.07/share and Mirvac is lowered 12% to A$2.00. Jarden also downgrades Mirvac to overweight, from buy. GPT is down 0.7% at A$4.48 and Mirvac falls 1.7% to A$1.79.

At the request of the copyright holder, you need to log in to view this content

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment