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On Wednesday, Barclays (LON:BARC) analysts upgraded Kojamo Oyj (HE:KOJAMO:FH) stock rating from Underweight to Overweight. The analysts also raised the price target to €12.50 from €10.20, citing potential earnings growth and improved occupancy rates.
The analysts noted that the recent signing of the disposal of the majority of Kojamo’s held-for-sale portfolio and a rise in occupancy have contributed to their revised outlook. They previously rated the company as Underweight due to exposure to an oversupplied market and low net yields.
Despite maintaining a cautious stance on low net yields, the analysts highlighted that Kojamo’s gross to net leakage includes most maintenance and modernization expenses, making the yield closer to true cash flow yield. They also reviewed Kojamo’s debt and determined that refinancing is less of a concern, as bank debt costs are near marginal costs and the company has cash headroom and disposal proceeds forthcoming.
The analysts now forecast earnings growth, expecting the earnings per share yield and compound annual growth rate to exceed 8% over the fiscal years 2025 to 2029. They believe there is potential for the stock to react positively to better like-for-like announcements in future quarterly earnings reports, given the lower base effect of Q2-Q3 2024.
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