While CGS-CIMB Research expects Frasers Property to record lower earnings ahead following the latter’s mixed operational performance across asset class and geography, it has remained bullish on the company.
The brokerage points out that active capital deployment is a potential upside catalyst for Frasers Property.
As a result, the brokerage has kept its “add” rating for the stock with an unchanged target price of $1.70.
But it has lowered its FY20-22 earnings per share forecasts by 1.3%-12.1% on slimmer projected hospitality margins and update for the latest real estate investment trust contributions.
According to CGS-CIMB, Frasers’ retail property occupancy in Singapore and Australia was lower y-o-y, while the company’s Singapore commercial portfolio saw an uptick in take-up rate.
On the other hand, occupancy for its Australia logistics and industrial portfolio slipped marginally y-o-y, while its Europe portfolio occupancy was stable.
CGS-CIMB notes that Frasers’ hospitality operations were impacted by the Covid-19 outbreak, resulting in lower occupancy and average room rates in 3Q FY20.
As at 2.27 pm, Frasers was flat at $1.19 with 113,500 shares changed hands.
