Source: Sharecast
"After the latest sharp upgrade to portfolio reversion at the 1H26 results, and subsequent integration into our MTSE [Medium Term Sustainable Earnings] framework we upgrade our measure of sustainable earnings 10.6% to 32.3p per share, and our periodic adjusted EPS forecasts by an average of 6.2%," Panmure said.
The target price increase and rating upgrade come off the back of this earnings upgrade, it said.
Panmure noted that total reversion is up 1.4x in the two years since 1H24 from £65m to £156m, largely driven by the office portfolio but also the Retail and Urban Logistics book.
"While we remain cautious of promises of growth tomorrow, the reversion and market rent progression is 1) in line with our own positive view on best quality London offices and retail parks / shopping centres, 2) our MTSE framework doesn’t speculate on future ERV growth, but does factor in reversion potential that’s in place and 3) we take 75% of the potential reversionary upside in our MTSE figures for our desired margin of safety," it said.
"Finally, 4) BLND say the reversion potential and vacancy is concentrated in new and refurbished space such as Norton Folgate and Regents Place."
At the current share price, the shares as attractive, Panmure said, and there is a floor to the share price emerging of about 400p, below which it would be "happy buyers and excluding bond market machinations see a return to the lows of 2025 as unlikely".
At 1140 GMT, the shares were up 2.3% at 416.20p.