Thu, Jan 28, 2021 - 12:27 PM CGS-CIMB has downgraded its "add" call on Ascott Residence Trust (ART) to "hold" while raising its target price on
Thu, Jan 28, 2021 – 12:27 PM
CGS-CIMB has downgraded its “add” call on Ascott Residence Trust (ART) to “hold” while raising its target price on the stapled hospitality group to S$1.08 from S$1.05 previously.
The research house’s downgrade comes after ART on Wednesday reported a H2 distribution per stapled security (DPS) of 1.99 cents, while also announcing that it had acquired its first purpose-built student accommodation asset for US$95 million.
In a report on Wednesday, CGS-CIMB analysts noted that ART’s valuation has recovered to its five-year mean of 0.9 times price-to-book value (P/BV) at the price of S$1.05 per stapled security. Further recovery remains volatile and hinges on the effective distribution of Covid-19 vaccines, said the analysts, who believe the trust lacks catalysts going forward.
The brokerage nonetheless has raised its estimations for ART’s FY 2020-2022 DPS by 4-10 per cent after factoring in its acquisition of the US student accommodation asset, recent divestments, and an expected S$10 million capital distribution for FY2021.
“Despite the pandemic, ART’s balance sheet remains robust with gearing at 36 per cent and S$1.05 billion…