Morgan Stanley analyst Simon Chan maintained a Hold rating on GPT Group (GPTGF – Research Report) today and set a price target of A$4.50.
Simon Chan has given his Hold rating due to a combination of factors surrounding GPT Group’s current market position and its performance in relation to industry peers. While GPT Group has shown underperformance in its stock price over the recent week and month compared to its peers in the Retail, Industrials, and Office sectors, it is notable that the company is diversified across these asset classes. Chan points out that GPT Group is trading at approximately a 9% discount compared to the implied valuations of its peers, which is within the historical range of plus or minus 10% observed over the past four to five years.
Furthermore, the assessment of GPT Group’s stock by Simon Chan suggests that there is a likely probability, between 60% to 70%, that the share price will rise relative to the industry over the next 30 days. This projection is subjective and based on Morgan Stanley’s evaluation of potential market scenarios. The Hold rating indicates that while there is an expectation of some positive movement in GPT Group’s share price, it may not be significant enough to warrant a more aggressive investment recommendation such as a Buy.
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GPT Group (GPTGF) Company Description:
GPT Group was listed in 1971 and is Australia’s oldest listed property trust. The business strategy is not particularly differentiated from peers, other than through its particularly conservative gearing and modest emphasis on development activity. The portfolio weighting to industrial is a major growth area for the firm, but is still minor at 12% of total revenue. GPT remains dominated by retail malls that generate about a third of its revenue, and another quarter from office.
