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Investing.com - UBS initiated coverage on Sime Darby Property Bhd (KLSE:SDPR) (OTC:SIMEF) with a Buy rating and a price target of MYR1.74, citing the company’s exposure to data centers and industrial property.
The research firm highlighted Sime Darby Property’s strategic shift toward industrial property and its potential to benefit from strong foreign direct investment (FDI) tailwinds. UBS expects the company to expand its industrial build-to-lease property beyond its two initial data center deals with Google (NASDAQ:GOOGL).
UBS forecasts a 16% headline EPS CAGR for Sime Darby Property over 2024-27, which it notes is the second fastest among its coverage universe and higher than the consensus estimate of 9% CAGR.
The firm believes the strong earnings growth and exposure to high-quality data center income justifies an 18x PE valuation multiple for the stock. According to UBS, Refinitiv’s current 16x multiple indicates that the upside potential for the share price is not yet priced in.
Sime Darby Property is a Malaysian property development company with growing interests in industrial and data center properties, positioning it to capitalize on Malaysia’s increasing attractiveness for technology infrastructure investments.
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