JFrog stock rises as Cantor Fitzgerald maintains Overweight rating after strong Q2
On Thursday, JPMorgan upgraded Sunway REIT (SREIT:MK) stock rating from Neutral to Overweight and increased its price target to MYR2.30, up from the previous MYR1.85. The adjustment reflects a positive outlook on the company’s financial strategies and growth prospects.
Analysts at JPMorgan highlighted the planned sale of the Sunway University and College campus as a strategic move that is expected to stabilize Sunway REIT’s gearing around 40% by the end of the year. This action is anticipated to address the primary concern among investors. Moreover, the analysts forecast a robust two-year distribution per unit (DPU) compound annual growth rate (CAGR) of 10%, which is the fastest among Malaysian REITs. This growth is driven by acquisitions and asset enhancement initiatives (AEIs) at Sunway Pyramid.
The firm’s analysts also pointed out Sunway REIT’s attractive net yield of 5.1%, which contributes to a favorable risk-reward profile. They anticipate the company’s valuation could be further enhanced by consensus estimates being revised upward throughout the year, with JPMorgan’s own FY25/26 DPU estimates being 2% and 4% higher than the market consensus, respectively.
In addition to internal growth drivers, JPMorgan also noted potential re-rating catalysts stemming from the possibility of Overnight Policy Rate (OPR) cuts in the second half of 2025. Within the context of ASEAN REITs, Sunway REIT is viewed as a compelling investment opportunity, especially when compared to Singapore REITs (S-REITs), which are expected to see a year-over-year decline in DPU and further reductions in Street estimates.
The upgrade and new price target reflect JPMorgan’s confidence in Sunway REIT’s strategic initiatives and its position within the regional real estate investment trust market.
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