European Residential REIT stock downgraded by Raymond James on wind-up concerns

Published 13/08/2025, 13:18
European Residential REIT stock downgraded by Raymond James on wind-up concerns

Investing.com - Raymond James downgraded European Residential REIT (TSX:ERE-U) from Outperform to Market Perform on Monday, while reducing its price target to C$2.75 from C$3.00.

The rating change, effective August 12, reflects Raymond James’ revised expectations for "relatively more limited total return upside" following the suspension of ERES’s monthly distribution rate.

The downgrade also stems from a reduced net asset value per unit estimate due to a higher applied capitalization rate assumption for the real estate investment trust.

Raymond James noted that during the company’s second-quarter 2025 earnings call, ERES displayed "a notable negative shift in tone" regarding increased uncertainty about the potential timing of its final wind-up.

The firm also highlighted ERES’s warning that potential wind-up costs, transaction fees, and other expenses "could be significant," further impacting the investment outlook.

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