Tuesday, March 22, 2011

JPMorgan upgrades CapitaMall Trust to Overweight

Stock Name: CapitaMall
Company Name: CAPITAMALL TRUST
Research House: JP Morgan Chase

JPMorgan upgrades CapitaMall Trust (C38U.SG) to Overweight from Neutral, with a $2.15 target price, “on the back of its strong and stable growth profile and undemanding valuation.”

The house says “the year-to-date underperformance has reflected the trust’s lack of near-term growth and priced in the dilution from its recent convertible bonds issuance.” 

In addition, JPM notes the key concern of the stock becoming a funding source for S-REITs’ strong equity fundraising pipeline should be alleviated given the postponement of fundraisings. 
“With the stock trading at 5.3% FY11E yield, a three-year DPU CAGR of 8.0% and a stable capital structure, CMT is likely to outperform in our view, especially in the current market environment.” 
REIT is up 1.7% at $1.80.  

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