Palantir a high-risk investment with ’a one-of-a-kind growth and margin model’
On Wednesday, Kepler Cheuvreux revised its price target for Segro PLC (LON:SGRO:LN) (OTC: SEGXF) shares, decreasing it to GBP8.40 from the previous GBP10.30. Despite the adjustment, the firm maintained a Buy rating on the stock. According to Kepler Cheuvreux, logistics companies have faced challenges in the stock market over the past year, with Segro experiencing similar difficulties.
The research firm highlighted that industrial stocks might continue to underperform in the short term due to negative headwinds, as evidenced from September to December. Nonetheless, Kepler Cheuvreux remains optimistic about the sector's ability to achieve solid earnings growth within a one-year timeframe. The revised price target reflects this outlook.
Kepler Cheuvreux's analysis suggests that the earnings visibility and net tangible assets (NTA) per share, assuming yield stabilization, present an attractive investment opportunity. However, the anticipated advantages from datacentre exposure have not yet been realized.
The firm anticipates that Segro's shares could continue to face pressure until investor confidence is restored regarding a rebound in tenant demand and the stabilization of vacancy rates and rents, which is projected to be a narrative for 2025.
The new price target of 840p represents a decrease from the former target of 1,030p, but the Buy rating indicates Kepler Cheuvreux's continued confidence in Segro's long-term prospects. The research firm's commentary underscores the potential for recovery and growth in the logistics sector despite the current market headwinds.
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