(Sharecast News) – Hammerson was upped to ‘overweight’ from ‘equalweight’ and the price target lifted to 36p from 27p. The bank downgraded Landsec to ‘equalweight’ from ‘overweight’ and cut the price target to 650p from 750p.
MS noted that Hammerson has made significant restructuring progress and said it sees value in the shares at current levels. It added that Landsec’s net asset value valuation gap to British Land is now at all-time wides – around 10pp which has never occurred over the last decade.
“We attribute this relative performance differential to British Land’s LTV increase at the recent FY results,” it said.
It also pointed to the fact that British Land has stated it will ‘continue to recycle out of mature assets’ and said it assumes assume this will mitigate the LTV soon enough.
More generally, the bank said: “UK balance sheets screen as sufficiently capitalised in the context of modest asset appraisals, while NAV valuation for many is close to or at all-time lows.
“We are alive to the fact that broader UK exposure and offices as a sub-sector are out of favour, but at current valuation the risk reward is compelling in our view.
“On the flipside, we see good reasons for sustained caution on Swedish stocks (Castellum, Fabege), retail REITs (Unibail, Klepierre) and highly levered names (Aroundtown).”
Engineering company Wood Group ticked up after saying it had struck a $330m services agreement with North Sea oil and gas producer Harbour Energy.
Under the deal, Wood will provide engineering, procurement and construction and operations and maintenance services, including digital and decarbonisation solutions, for a number of Harbour’s offshore assets.
The partnership will run for an initial term of five years, with five one-year extension options covering Harbour’s operated assets, including its J-Area, Greater Britannia Area, Solan and Armada, Everest, Lomond and Erskine hubs.
FTSE 250 facilities management group Mitie is spending £31.5m to buy Stevenage-based JC Engineering, a specialist in cooling systems for data centres.
Mitie, which provides everything from commercial cleaning to engineering maintenance and landscaping, announced on Monday the acquisition price comprises an initial payment of £21m and deferred payments of up to £10.5m over three years, linked to performance, and will be funded by existing loan facilities.
“The acquisition of JCA Engineering follows the Group’s strategy to invest in high growth, high margin companies, enhancing our projects capabilities in the growth areas of energy efficiency, office fitouts and critical environments,” said Mitie chief executive Phil Bentley.
JCA works on complex engineering projects across the UK, specialising in consulting, design, build and maintenance, with a particular focus on critical environments such as data centres, life sciences and healthcare sectors. It holds design patents for cooling systems in data centres.
For the 2022 financial year, JCA generated £72m in revenues, up 17% year-on-year, while EBITDA rose 4% to £5.1m.
Online trading platform CMC Markets nudged lower as it announced the appointment of Albert Soleiman as chief financial officer, replacing Euan Marshall, who has retired from the board.
Morgan Stanley lifted its rating on Hammerson on Monday but downgraded Landsec as it took a look at property stocks.
FTSE 250 (MCX) 18,592.70 0.30%
FTSE 250 – Risers
Ferrexpo (FXPO) 83.10p 6.74%
TUI AG Reg Shs (DI) (TUI) 469.60p 3.57%
Watches of Switzerland Group (WOSG) 608.50p 3.22%
Trainline (TRN) 237.00p 2.95%
ICG Enterprise Trust (ICGT) 1,130.00p 2.91%
Balanced Commercial Property Trust Limited (BCPT) 70.60p 2.77%
Darktrace (DARK) 379.70p 2.62%
Hammerson (HMSO) 24.54p 2.51%
easyJet (EZJ) 434.80p 2.31%
Future (FUTR) 799.00p 2.04%
FTSE 250 – Fallers
Direct Line Insurance Group (DLG) 154.95p -2.42%
Syncona Limited NPV (SYNC) 128.00p -2.29%
Diversified Energy Company (DEC) 86.30p -2.04%
North Atlantic Smaller Companies Inv Trust (NAS) 3,470.00p -1.70%
CMC Markets (CMCX) 106.00p -1.67%
CLS Holdings (CLI) 125.60p -1.57%
OSB Group (OSB) 337.60p -1.29%
Liontrust Asset Management (LIO) 645.00p -1.23%
Ashmore Group (ASHM) 191.80p -1.18%
Cranswick (CWK) 3,322.00p -1.13%