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Investing.com - BMO Capital maintained its Market Perform rating and Cdn$32.00 price target on Leon’s Furniture (TSX:LNF) (OTC:LEFUF) on Friday, highlighting the embedded value in the company’s real estate portfolio.
BMO Capital analyst Stephen MacLeod refreshed the firm’s real estate valuation framework and introduced a sum-of-the-parts analysis for the Canadian furniture retailer.
The analysis estimates that Leon’s 5.5 million square foot real estate portfolio has a fair value of approximately Cdn$0.9-1.4 billion, representing significant underlying asset value.
BMO sees potential near-term gains of Cdn$3-4 per share to reach their Cdn$32 target price, which reflects their "base case" REIT assumptions for the furniture company.
The firm also noted potential for incremental upside over the longer term (10+ years) from future redevelopment initiatives, though timing remains uncertain for these strategic priorities.
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