Company Name: PARKWAYLIFE REIT
| Research House: CIMB | Price Call: HOLD | Target Price: 2.11 |
CIMB Research downgraded Parkway Life Real Estate Investment Trust , which owns healthcare assets, to ‘neutral’ from ‘outperform’, citing high valuations as it trades at a premium.
Units of Parkway Life were down 0.5% at $1.925, and have gained 8.2% so far this year.
“The market has rewarded the stock with a handsome defensive premium. At 30% premium over book and yield compression to 5%, we struggle to see significant upside,” said CIMB.
However, CIMB raised its target price to $2.11 from $1.96, taking into account a lower discount rate of 7%, and said possible acquisitions in Malaysia and Australia could be a re-rating catalyst.
In Japan, the plans of Parkway Life’s management to upgrade assets is a compelling strategy for long-term growth, said CIMB.
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