Vicinity Centre can cope with higher interest rates better than peers - Morningstar

Vicinity Centres

20/09/2022 24:57

** Morningstar improves uncertainty rating for Australian
mall operator Vicinity Centre  VCX.AX  to "medium" from "high",
maintains fair value estimate of A$1.95
    ** Says VCX can cope with higher interest rates better than
most property stocks 
    ** Says impact of pandemic lockdowns and Omicron-related
isolations largely in the past for VCX
    ** Brokerage expects 3.5% improvement in VCX's funds from
operations in FY23 after a 7% increase in FY22, despite higher
interest rates
    ** Says revenue recovery should offset rising debt costs in
near term
    ** Notes VCX's exposure to interest rate rises on debt is
limited until FY25 and says by that time revenue growth should
provide further offset
    ** One of 14 analysts rate the stock "buy" or higher, 10
"hold" and three "sell" or lower; their median PT is A$2.03 –
Refinitiv data
    ** Stock had risen 10.4% this year, as of last close     

 (Reporting by Echha Jain in Bengaluru)
 ((Echha.jain@thomsonreuters.com))