{"id":329087,"date":"2024-08-20T22:37:50","date_gmt":"2024-08-20T14:37:50","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=329087"},"modified":"2024-08-27T00:29:53","modified_gmt":"2024-08-26T16:29:53","slug":"stock-in-focus-areit-inc-areit-21-aug-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-areit-inc-areit-21-aug-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: AREIT Inc. (AREIT) – 21 Aug 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>AREIT<\/td><\/tr>
Company Name<\/strong><\/td>AREIT Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>21 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 43.64<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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While we remain positive for the company\u2019s trajectory as it has shown its ability to continue increasing its assets under management (AUM) and dividends per share (DPS) through significant asset infusions, we are re-rating it to a HOLD purely because of the lack of upside from current levels, a re-rating back to BUY will be warranted in the event that the stock retraces near the P36.00 levels.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Earnings continue growth<\/strong><\/p>\n\n\n\n

AREIT registered earnings growth of 40.2% year-on-year (YoY) for the first half primarily driven by its acquisitions of new office towers and malls. Excluding net fair value change in investment properties would result to earnings growth of 44%. Overall occupancy remains considerably high vs industry at 96% and a WALE of 10.2 years. Steady dividend progression driven by infusions. <\/p>\n\n\n\n

AREIT has consistently delivered higher dividends through the infusions of a mix of office, retail, and hotels. The P0.56\/sh dividends declared for 2Q24 is 5.6% higher YoY and 100% higher than their first declared dividend at IPO. We expect this trend to continue moving forward as the company infuses even more properties to its portfolio with 2024 AUM expected to end up at P117-Bn upon the infusion of P30-Bn worth of properties which is expected to be completed this quarter.<\/p>\n\n\n\n

Diversified portfolio mix<\/strong><\/p>\n\n\n\n

Looking at their portfolio mix, we see significant changes this year with office exposure decreasing by 12% as expansion is focused towards adding in retail which increased to 11% from 8%, hotels to 6% from 3% and industrial land to 7% from 1%. We see this as a positive progression given the difficult environment that the office segment is facing. <\/p>\n\n\n\n

Moving forward, we note management stating that more focus will be allocated towards growing their retail and hotel assets, aiming to expand it at a faster pace than offices. This aligns with AREIT\u2019s goal to achieve a portfolio mix of double digit % composition for each asset class.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>