Tritax EuroBox’s discount to its assets is unjustified relative to its peers’ large premiums, Royal Bank of Canada said as it initiated coverage with an ‘outperform’ rating.
“EuroBox offers high rent visibility from its inflation-linked leases on large well-located European logistics property while asset management initiatives should help supplement rent growth,” RBC analyst Saravana Bala wrote in a note to clients.
Leveraged investment into the warehouse operator’s 550m (£473m) pipeline, lower cost of debt and a declining cost ratio mean EuroBox should generate a 13% underlying earnings per share compound annual growth rate (CAGR) over three years, Bala said. Development activity and further yield compression will help drive a 9% CAGR in net asset value over three years, he added.
Bala set a price target of 130p for EuroBox’s shares. The shares rose 1.1% to 109p at 13:57 BST.
