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Investing.com - UBS downgraded Swiss Prime Site AG (SIX:SPSN) (OTC:SWPRF) from Neutral to Sell on Thursday, while slightly raising its price target to CHF106.00 from CHF104.00.
The Swiss real estate sector has outperformed the broader SPI by 26 percentage points over the last 12 months, with Swiss Prime Site outperforming by an even wider margin of 34 percentage points, according to UBS.
The downgrade comes as UBS sees the company’s premium over 12-month forward NAV reaching approximately 17%, significantly above its 20-year average of -11%. UBS noted that the only other time in the past 20 years when the NAV premium reached this level, the stock delivered a 12-month return of -26%.
UBS reduced its earnings per share estimates for Swiss Prime Site by an average of 1% for fiscal years 2025-2027, while simultaneously raising its valuation gain assumptions and lowering its weighted average cost of capital by 20 basis points to 3.6%.
The investment bank identified potential downside catalysts including Swiss National Bank rate hikes and indications of expensive real estate transactions, with risks to near-term rental income evolution skewed to the downside.
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