Through acquisition of Ala Moana, Mantra Group is expanding to Hawaii. The acquisition will be funded by a recently completed $107m equity raising.
Morgans observes this property brings new country risk and raises the question of just how many scalable opportunities there are in Australia.
That said, the broker notes it is a key tourist destination with high occupancy. Hold rating retained, given the stock is trading at a premium to peers. Target lowered to $4.20 from $4.25.
Sector: Consumer Services.
Target price is $4.20.Current Price is $3.85. Difference: $0.35 – (brackets indicate current price is over target). If MTR meets the Morgans target it will return approximately 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).