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Investing.com - Bernstein SocGen Group upgraded Carmila SA (EPA:CARM) from Underperform to Market Perform with a price target of EUR18.50, citing valuation grounds following the stock’s underperformance compared to peers since the beginning of the year.
The retail property company has delivered solid rental growth in the past two years, with 4.7% growth in 2023 and 4.2% in 2024, followed by 3.7% growth in the first quarter of 2025, according to Bernstein. This growth has been supported by indexation and asset management initiatives, with rent reversion of 3.4% in the first quarter.
Bernstein expects Carmila to continue this growth trend over the next few years, albeit at a more normalized pace due to declining indexation. The firm projects that Carmila will deliver over 5% cash-flow growth in 2025 and a three-year compound annual growth rate of 3.7%, which exceeds the sector average and ranks highest among Bernstein’s retail peers, excluding CEE-focused NEPI Rockcastle.
The recent Galimmo acquisition offers potential upside, Bernstein notes. At the first quarter of 2025, Carmila’s financial occupancy including Galimmo was 95.6%, which is 40 basis points lower than the level excluding Galimmo (96.0%), suggesting room to improve Galimmo’s performance to match Carmila’s standards.
Carmila also benefits from a solid balance sheet with an EPRA loan-to-value ratio including transfer taxes of 38.9%, which provides flexibility for accretive investment and capital rotation, according to the research firm.
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