On Friday, Goldman Sachs updated its stance on Gecina SA (GFC:FP) (OTC: GECFF) stock, a French real estate investment company, by slightly raising the price target to EUR120.40 from EUR120.10. The firm continues to recommend a Buy rating.
The adjustment in the price target comes after the company reported its third-quarter results for 2024. The Goldman Sachs analyst noted that the operating drivers for Gecina were strong, which led to a minor beat in the top-line revenue for the quarter. Consequently, the firm has revised its forecasts, incorporating these recent developments.
The earnings per share (EPS) estimates for the years 2024 to 2028 have seen a marginal change, ranging from a decrease of 4% to no change at all. This revision is attributed to a slight adjustment in the pipeline assumptions for Gecina. Despite the minimal alteration in the EPS forecast, the price target remains virtually unchanged, offering a potential 13% upside from the current trading price.
The analyst further explained that the new price target reflects a small decrease in the weighted average cost of capital (WACC) by 2 basis points, owing to lower credit spreads. This minor adjustment contributes to the valuation of the company.
At the current trading level, Gecina’s shares are valued at a 6.0% earnings yield for the year 2024 estimates (2024E) and are trading at a 28% discount to the firm’s estimated net tangible assets (NTA) for 2024. This valuation underpins the Buy rating reiterated by Goldman Sachs.
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