Jefferies downgrades GPT Group to hold as rate risks cloud earnings outlook

GPT

12/04/2026 20:45

** Jefferies downgrades Australia's GPT Group GPT.AX to 'hold' from 'buy', and lowers its price target by 18% to A$5.04, assuming lower funds from operations in FY26-28 along with increasing concerns over gearing in a higher-for-longer cash rate environment

** Brokerage trims FY26-FY28 FFO estimates by ~1% to 5%, mainly due to impact from benchmark interest rate changes and a more cautious recovery outlook for co's office portfolio

** Says property co's FY26 earnings are relatively protected from rate rises due to the extent of hedging, but sees reduced hedging cover in FY27 likely prompting further earnings downgrades

** Does not see balance‑sheet risk currently, but says gearing is likely to draw greater market scrutiny as higher rates persist

** Stock down 14.2% YTD, compared with the real estate index's .AXRE 13.2% decline

 (Reporting by Shruti Agarwal in Bengaluru)

 ((Shruti.Agarwal@thomsonreuters.com))