Citi cuts Aedifica stock target to EUR77.80, maintains buy

Published 28/05/2025, 08:04
Citi cuts Aedifica stock target to EUR77.80, maintains buy

On Wednesday, Citi analysts adjusted their financial outlook on Aedifica SA ( Euronext (EPA:ENX) Brussels:AED), reducing the price target to €77.80 from the previous €79.70. Despite this change, they have decided to maintain a Buy rating on the stock. The revision follows a detailed review of the potential effects stemming from Aedifica’s proposed all-share acquisition of peer company Cofinimmo (EBR:COFB).

The analysts at Citi have pointed out that the impact of the acquisition appears broadly neutral. Their scenario analysis suggests that investors should consider a slight earnings per share (EPS) dilution of approximately 2% by the year 2029. This potential decrease could be balanced by synergies in finance costs and the sale of assets that have a high cost base. Additionally, they forecast a 6% dilution in net asset value (NAV) for 2029, which they attribute to a modest increase in debt and the share of minorities.

The report also highlights that the merger could lead to a reduced share of geographies with higher rent per square meter within the combined entity. However, these factors are to be considered alongside the potential advantages of creating a larger organization. The benefits include enhanced liquidity, improved access to capital markets, and broader geographical and tenant diversification.

The updated valuation of Aedifica by Citi does not incorporate the ongoing negotiations regarding the acquisition. The analysts have expressed continued support for investing in Aedifica, albeit with the slightly reduced target price. They justify the new price target with a reference to an increased weighted average cost of capital (WACC). The Citi analyst team’s commentary emphasized their position on Aedifica, stating, "We remain buyers of Aedifica with a slightly lower target price at €77.8 mainly driven by a higher WACC."

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