GPT
Stock Code
Stock Exchange
GPT Group (GPT or General Property Trust) is engaged in property investment. It is also the largest diversified property trust in Australia. GPT was listed on the Australian Stock Exchange on the 1st of April 1971. Its average annual revenue reaches approximately AUD$836 million. Its headquarters is located New South Wales, Australia. GPT Group operates mainly in seven business segments: Office, Retail, Hotel & Tourism, Industrial, Funds Management, Seniors Housing, Corporate and Venture.
GPT Group’s (GPT) plan to split up its troubled listed property trust’s $6 billion worth of toxic Babcock & Brown joint venture might face resistance from some of the key investors as a large number of fund managers of property security who has invested money in the oldest property trust of Australia will not be able to own stocks in an unlisted trust.
David Jones (DJS), a company that operates departmental stores in Australia and provides diversified range of both local and international brands was the best performer in Australian Stock Exchange ASX100 adding 7.1 percent or 30 cents in its stock price closing the week at $4.48.
GPT Group was the overall worst performing stock taking in a 36.58 percent decrease. Among the worst performing stocks for the week 28 of 2008 on the Australian sharemarket were a mixture of real estate business and property management companies: GPT Group (GPT), Mirvac Group (MGR), Stockland (SGP), Macquarie DDR Trust (MDT). These worst performing stocks for week 28 of 2008 recorded losses above 17.39 percent and all of these companies were real estate companies.
Felix Resources was the overall worst performing stock taking in a 20.07 percent decrease in their share price. Among the worst performing stocks for the week 26 of 2008 of the Australian sharemarket were a mixture of property management, agribusiness, mining, utility infrastructure services: Valad Property (VPG), GPT Group (GPT), Futuris Corporation (FCL), Felix Resources (FLX), Spark Infrastructure (SKI), Great Southern (GTP). These worst performing stocks for week 26 of 2008 recorded losses above 14.44 percent by the end of the trading week.
GPT has an upgraded recommendation to Outperform and a 12 month share price target of $5.27 from Australian sharemarket analyst Macquarie Research Equities. After attending an operational briefing and tour of GPT's US assets, the analysts have undertaken a detailed review of the company’s investment in the US seniors' housing market. Guidance conservative: The US seniors housing market is attractive as it offers higher earnings growth and total returns than traditional property asset classes. Management has provided guidance of 4–5% NOI growth and a 10-year unleveraged IRR of >11%. The analysts believe this guidance is conservative with favourable industry conditions allowing industry peers in recent periods to generate NOI growth >10% and previous investment partners with BAL achieving IRRs of 20–60%. US seniors housing investment expected to more than double: The acquisition of a second portfolio of US seniors housing assets came sooner than they anticipated and takes GPT's total investment to US$697m or ~8% of GPT Trust assets. However, GPT management has suggested the investment in US seniors’ housing is part of the ‘core’ investment portfolio and could grow to ~US$1.2–1.6bn. This suggests US seniors housing could become ~20% of GPT Trust assets. US seniors housing a key driver of future growth: GPT has identified three key strategies alongside the investment portfolio and JV with BNB to drive future growth. Firstly, the creation of the wholesale funds management business. Secondly, enhanced ability to develop on-balance sheet for profit and sell completed product to the market or into wholesale funds. Lastly, GPT management envisages owning and managing four to five operating businesses longer term. They believe the US seniors housing acquisition is part of the last growth strategy as a significant proportion of earnings combines ownership of property with an operating business.The investment in US seniors’ housing was initially a key concern for us regarding GPT's strategy. However, the tour and meetings with industry peers have reassured the analysts that the investment is attractive. Greater comfort with GPT’s strategy combined with the recent ~12% decline in GPT's share price has led the analysts to upgrade their recommendation to outperform with a 12-month price target of $5.27.
Macquarie Research Equities (MRE) note that ""
With investors increasingly risk averse, share prices are at risk in this reporting season if profit delivery does not match the market’s expectations. This change in investor risk appetite driven by concerns over the outlook for global growth and the continued increase in cash rates around the world (ECB and Bank of England the most recent) is impacting on market valuations.
SB Citigroup rated the GPT Group (GPT) stock as Hold, Medium Risk with a share price target slightly increasing to $4.29 from $4.16 and valuation increasing from $3.99 to $4.13. The broker notes the group has established its first wholesale funds under management operation - the GPT Wholesale Office Fund.
If you wish to use these broker recommendations for trading shares listed on the Australian Stock Exchange, it is highly recommended that you back up your analysis using fundamental or technical analysis or a combination of both before investing in any company.
UBS has a Neutral 2 recommendation for National Australia Bank (NAB) with a target of $35 per share.
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