Morningstar deems Arena REIT as 'overvalued' but highlights strong FY results

Arena REIT No 1

14/08/2022 20:00

** Analysts at Morningstar raise their fair value estimate
for Australia-based Arena REIT No 1  ARF.AX  following a strong
fiscal year in which the childcare centres landlord reported a
102% increase in its statutory net profit from a year earlier
    ** Morningstar raises ARF's fair value estimate to A$3.40
per share from A$3.20 per share 
    ** However, the brokerage says at current share prices, the
company screens as 'overvalued'
    ** "With rising interest rates we see an increasingly
diminished differential between Arena’s yield compared with
other income options"- Morningstar 
    ** Brokerage sees occupancy for co's current assets and
future developments in Arena’s childcare portfolio to remain at
or close to 100%
    ** Morningstar says ARF is well positioned to fund potential
acquisitions and to work through an environment of declining
property values
    ** Five of nine analysts rate the stock "hold", and four
"sell" or lower; median PT is A$4.35 – Refinitiv data
    ** ARF down 9.7% this year, as of last close

($1 = 1.4043 Australian dollars)

 (Reporting by Roushni Nair in Bengaluru)
 ((Roushni.Nair@thomsonreuters.com;))