The broker initiates coverage of Abacus Property with an Outperform rating, believing the investment fundamentals are becoming more attractive as the business transitions away from being a real estate trader towards acquiring assets offering recurring revenues, specifically self-storage, which the broker sees as continuing to grow strongly.
Abacus trades at a discount to the ASX200 REIT index and the broker suggests near term earnings will continue to slide as assets are sold and strategy is realigned, but by FY20 sustainable earnings growth should emerge. Target $4.00.
Sector: Real Estate.
Target price is $4.00.Current Price is $4.08. Difference: ($0.08) – (brackets indicate current price is over target). If ABP meets the Credit Suisse target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
