Barclays upgrades URW on earnings potential after 'unjust' share decline

Klepierre SA

18/09/2023 09:16

** Barclays upgrades mall operator Unibail-Rodamco-Westfield
 URW.PA  to "overweight" from "underweight", deeming the stock's
underperformance against sector rivals "unjust" considering its
earnings potential
    ** URW has underperformed retail peers this year, -3% YTD vs
+26% for closest competitor Klepierre, but the broker points to
its "best in class" asset advantage in the retail sub-sector
    ** Barclays says it believes URW can claim higher earnings
yields (FY23 estimate 16%) than Klepierre (FY23 estimate 9.3%)
    ** Big risk remains around the company's 59% loan-to-value
ratio, Barclays says, noting URW has disposed or foreclosed 0.6
bln euros ($0.64 bln) in assets YTD, while the broker estimates
11 bln euros will be needed over 2024-2027 to manage the risk
    ** "We see the situation as being a trade off between the
risk on the group's high leverage position vs. its relative
valuation to peers" - Barclays
    ** It raises URW's target price to 58 euros from 47 euros
    ** Shares in URW are up 1.9% at 48.1 euros per share as of
0816 GMT

 (Reporting by Pierre John Felcenloben)
 ((pierrejohn.felcenloben@thomsonreuters.com))