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Investing.com - JPMorgan has upgraded Suntec REIT (SUN:SP) from Neutral to Overweight and raised its price target to SGD1.45 from SGD1.20.
The upgrade comes as JPMorgan forecasts a three-year 6.4% distribution per unit (DPU) compound annual growth rate for the Singapore-based real estate investment trust.
JPMorgan expects Suntec REIT to benefit from improving top-line performance and lower interest costs in the coming years.
The financial services firm projects the REIT’s cost of debt will decline from 4.1% in FY24 to 3.8% in FY25, 3.6% in FY26, and 3.4% in FY27.
JPMorgan also anticipates gradual top-line recovery beginning in FY26, driven by backfilling of vacancies, positive reversions, and the potential restart of divestments in a more favorable interest rate environment.
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