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Investing.com - UBS has upgraded Intershop Holding AG (SIX:ISN) from Sell to Buy while raising its price target to CHF152.00 from CHF124.00, citing expectations for improved returns and dividend growth potential.
The Swiss real estate company is expected to see its return on equity trend toward the targeted 8% by 2026, following a period of temporary underperformance amid low transaction levels, according to UBS.
UBS highlighted that Intershop already offers the highest dividend yield among Swiss real estate peers and estimates further potential dividend increases of 27% by 2027 to CHF7 per share.
The upgrade also reflects Intershop’s compressed valuation premium, which has decreased from a historical average of 19% versus peers over the last five years to approximately 9% following underperformance over the past 12 months, creating what UBS describes as "an attractive entry point."
UBS raised its price target after increasing topline estimates by 8% for fiscal years 2025-2027 on average, primarily driven by inorganic growth, while also raising EPS estimates by 15% and lowering its weighted average cost of capital by 90 basis points to 3.5%.
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