Centuria Industrial's guidance misses estimates; analysts recommend asset sales

Centuria Industrial Reit

05/08/2022 06:17

** Shares of Australia's Centuria Industrial REIT  CIP.AX 
rise as much as 2% to A$3.04, but stock is still down over 4%
this week and is set for its biggest weekly decline since
early-July
    ** CIP on Thursday announced FY23 funds from operations
(FFO) guidance of 17.0 Au cents per unit (cpu), below Visible
Alpha consensus estimate of 17.9 Au cpu 
    ** CIP also announced distribution guidance of 16.0 Au cpu,
missing consensus estimate of 16.8 Au cpu 
    ** Jefferies lowers CIP's PT to A$3.32 from A$3.41, says CIP
benefits from strong fundamentals, but growth is offset by
rising debt costs & elevated gearing
    ** UBS analysts, however, say CIP's FFO guidance is higher
than their own estimates by 2%
    ** "CIP is enjoying robust occupancy and rental growth
trends are supportive" - UBS
    ** Analysts at UBS and Jefferies say CIP's interest rate
hedging and debt cost assumptions for FY23 are conservative;
they recommend sale of assets to reduce leverage
    ** Eight of 12 analysts rate the stock "buy" or higher, 3
rate it "hold" and one "sell"; their median PT is A$3.42-
Refinitiv data
    ** Stock down ~29% this year, as of last close

 (Reporting by Anan Ashraf in Bengaluru)
 ((Anan.Ashraf@thomsonreuters.com;))