Invest Securities has adjusted its recommendation on Foncière Lyonnaise (SFL) shares from "buy" to "sell", with a significantly reduced target price from 91.8 to 60.6 euros.

The analyst highlights a "very good operating performance" in the 1st quarter, with organic rental growth of +7.5% in a context of near-perfect occupancy rate (99.4%), as well as a significant pipeline of projects (900ME) backed by a good debt profile.

RNR is expected to post strong growth over the next two years (+8.1% in 2023 and +11.8% in 2024)", believes Invest.

However, the research firm believes that the share's valuation seems "too high", even if SFL is one of the few real estate companies offering excellent guarantees in terms of revenue growth.

Furthermore, "the company will have to deal with a portfolio that is highly exposed to rising capitalization rates: its NAV could reach its low point in 2024 (-34% vs. 2022)". Finally, Invest notes that since Colonial's takeover bid in August 2021, 'the stock has suffered from virtually non-existent liquidity (1.6% free float)'.


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