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Investing.com - Bernstein has upgraded Covivio (EPA:COV) from Market Perform to Outperform, while raising its price target to EUR64.00 from EUR61.00, citing improved prospects for the company’s hotel business.
The upgrade comes as European hotel data shows RevPar (revenue per available room) across Europe has maintained better performance than in the US and China, with recent figures indicating a return to high growth rates seen earlier in 2024.
Covivio’s hotel division reported like-for-like revenue growth of 4.7% in the first quarter, driven by strong variable revenues which increased 9.1% on a like-for-like basis and represent 47% of the hotel portfolio.
The property group outlined its strategic priorities during a Capital Markets Day last year, aiming to rebalance its portfolio equally among offices (currently 50%), residential (currently 30%), and hotels (currently 20%), while enhancing returns.
Bernstein expressed support for Covivio’s plans to improve the overall quality of its portfolio while continuing to enhance returns, though it acknowledged that uncertainties remain high with performance varying across different countries.
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