This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Trade Parameters
Observations – For
Observations – Against
Shares bounced off triple support level. Potential for extension of current rising channel. Warehouses in demand for organising e-commerce delivery. In mid-April analysts at Liberum said Segro was well-positioned to benefit from strong performance of industrial commercial property , one of the strongest within UK real estate. Similarly, Numis said Segro was “one of the most attractive names in our universe at this time”, its scale and speed being key and Q1 momentum showing no sign of abating. The company’s April trading update had Q1 rent at a record quarterly level, vacancies low.
Risks to the UK’s commercial property sector include Brexit uncertainty, a downturn in e-commerce, higher interest rates denting consumer confidence and making business more expensive, a protracted slowing in UK real estate. The shares could be hurt by brokers/analysts downgrading their ratings and/or price targets or a bad set of financial results (26 July).
Broker consensus is positively biased, with 61% of analysts recommending Buy, 28% Neutral and only 11% saying Sell. The consensus target of 690p suggests 4% upside, just shy of our 700p short-term objective target. Only 42% of brokers see upside from current levels, however, the share price bounce towards 10yr highs could encourage upgrades.
Next Event: H1 Results, 26 Jul; Ex-div, mid-Aug
Latest Broker 12-Month Consensus: 61% Buy, 28% Hold, 11% Sell (full breakdown on request)
Source: DowJones Newswires, Reuters News, Bloomberg or Company Press releases
| Share | 1wk | 1m | 3m | 6m | 1yr | 2yr | 3yr | 4yr | 5yr |
| Perf % | 0.3 | 2.0 | 13.5 | 14.9 | 33.3 | 74.9 | 66.4 | 103.0 | 155.9 |
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Prepared by Michael van Dulken, Head of Research