Market pessimistic on 'undervalued' Scentre Group, Morningstar says

Scentre

10/07/2024 05:12

** Analysts at Morningstar think the market is slightly too
pessimistic when it comes to Australia's Scentre Group  SCG.AX ,
adding that the REIT looks moderately undervalued
    ** Morningstar has a fair value estimate of A$3.50, a
premium to stock's current price of A$3.18
    ** SCG currently trading 0.2% lower
    ** Scentre’s property management contracts are another
source of value, brokerage says
    ** Adds it is unlikely that rival retail developments could
threaten most of Scentre’s assets
    ** Retailers will continue to be located in Scentre
facilities, with near full occupancy in most circumstances -
Morningstar
    ** However, brokerage is concerned about co's balance sheet
as it thinks gearing might rise to around 40% if its $2.7 bln in
subordinated note is included
    ** Stock has risen 6.4% this year, as of last close 

 (Reporting by Rishav Chatterjee in Bengaluru)
 ((Rishav.Chatterjee@thomsonreuters.com;))