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Investing.com - Barclays has upgraded Hammerson Plc (LON:HMSO) (OTC:HMSNF) from Underweight to Overweight and raised its price target to GBP3.30 from GBP2.60, citing the company’s recent acquisitions and growth potential.
The upgrade follows Hammerson’s partly equity-funded acquisition of the remaining stake in the Bullring, which Barclays notes was immediately 4% accretive to earnings per share (EPS). This acquisition came after the company’s WestQuay purchase, demonstrating stronger acquisition capabilities than previously anticipated.
Barclays expects Hammerson’s increasing scale to reduce its cost ratio as the firm’s current operational platform appears oversized for its asset base. The investment bank also anticipates lower refinancing rates, expecting more future debt to be priced in lower-coupon Eurobonds following a recent Eurobond issuance.
The revised outlook has led Barclays to increase its EPS forecasts for Hammerson by approximately 3% for fiscal year 2026 and by 26% for fiscal year 2029. The property company’s growth profile now shows a 3.5% FY24-29E EPS compound annual growth rate, improved from a previous forecast of -1.2%.
While Hammerson’s FY26E EPS yield of 7.2% remains more expensive than retail peers Unibail-Rodamco-Westfield (10.5%) and Land Securities (8.3%), Barclays considers the stock attractively valued compared to its coverage universe, which has an FY26E average EPS yield of 6.9% and a 1.1% five-year compound annual growth rate.
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