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On Wednesday, Land Securities (LON:LAND) Group (OTC:LDSCY) PLC (LAND:LN), commonly known as Landsec, received an upgraded stock rating from Kepler Cheuvreux, moving from "Hold" to "Buy." Alongside the rating change, the firm also increased the price target for Landsec shares from GBP6.40 to GBP6.70.
The upgrade comes in the wake of Landsec’s fiscal year 2025 results, which, according to Kepler Cheuvreux analyst Julian Livingston-Booth, have improved the visibility on the company’s earnings per share (EPS) growth. Livingston-Booth noted that despite the strategic update’s long timeline and the lack of historical precedent, the 5.0% like-for-like net rental income (LFL NRI) growth and the increase in reversionary potential to 9% bolstered confidence in Landsec’s ability to deliver EPS growth.
The analyst acknowledged that while the growth might not be particularly exciting, the 8.6% earnings yield that is implied by the current share price of Landsec is deemed attractive. The increased earnings yield is a key factor that supports the more positive outlook on the stock.
Livingston-Booth’s analysis suggests that there is an 18% upside potential for Landsec shares, based on the new price target of 670 pence (GBP6.70). This target is set 5% higher than the previous one, reflecting the analyst’s optimism about the company’s prospects.
In conclusion, Kepler Cheuvreux’s revised stance on Landsec shares is driven by the company’s solid financial performance and potential for continuous EPS growth. The new "Buy" rating and higher price target indicate the firm’s belief that Landsec is well-positioned to provide value to its shareholders.
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