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Investing.com - UBS downgraded PSP Swiss Property (SIX:PSPN) from Buy to Neutral on Thursday, while lowering its price target to CHF148.00 from CHF153.00.
The Swiss real estate sector has outperformed the broader SPI by 25 percentage points over the last 12 months, according to UBS analyst Tommaso Operto.
UBS expects tailwinds for the sector to fade, citing expectations that interest rates have bottomed and the Swiss franc is beginning to weaken.
The outperformance has driven the NAV premium over 12-month forward NAV for the sector to the high end of its historical valuation range at approximately 15%, compared to a 0.3% average over the last 5 years, in what UBS describes as a "typically mean-reverting sector."
UBS sees more potential upside within Swiss real estate in Intershop than in PSP Swiss Property, leading to the downgrade despite only modest adjustments to its estimates for PSP.
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