SPH REIT

Here are some stocks to check out this week.

Analysts may be mixed on the REIT, but they have all cut their DPU estimates for FY20.

The manager of SPH REIT declared on Wednesday evening a distribution per unit (DPU) of 0.5 cent for 3Q20 ended March, some 64.0% lower than the DPU of 1.39 cents in 3Q19.

UOB Kay Hian analysts Lucas Teng and John Cheong have maintained their “hold” call on Singapore Press Holdings (SPH) with an unchanged target price of $1.52, which represents a 11.7% upside on the stock.

Singapore’s labour movement, the National Trade Union Congress, is no longer a substantial shareholder in SPH REIT.

As Singapore gradually reopens from its circuit breaker measures, DBS analyst Derek Tan and its Singapore research team believe that retail REITs are the “preferred” sector due to earlier-than-anticipated mall openings.

DBS Group Research analyst Dale Lai and the Singapore research team has upgraded SPH REIT to “hold” from “fully valued” in a May 29 report, on the REIT’s retained income on its lowered DPU.

For the next few months, investors may start monitoring price to net asset value for REITs rather than their yields.

Although the REIT had an "operationally steady quarter", analysts are quick to caution that it remains susceptible to retail headwinds as the Covid-19 outbreak escalates.

The steep cut in distribution comes as the REIT braces itself for challenging circumstances arising from the Covid-19 situation.