Street Calls of the Week
Investing.com - Desjardins downgraded Allied Properties Real Estate (TSX:AP-U) (OTC:APYRF) from Hold to Sell on Monday, setting a price target of C$18.00.
The downgrade follows what Desjardins described as "strong unit price performance" for the real estate investment trust since July 31, resulting in a negative 4% total return to the firm’s target price.
Desjardins cited valuation concerns as the primary reason for the rating change, noting that Allied Properties’ current valuation "screens expensive" particularly when measured by price-to-net asset value (P/NAV) and implied capitalization rate.
The research firm stated that the current valuation fails to appropriately reflect the current state of the office market, which continues to face challenges.
Desjardins also pointed to "potential headwinds" that the REIT could encounter over the next 12-18 months as another factor in its downgrade decision.
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