CQR – Credit Suisse rates the stock as Neutral

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Charter Hall Retail has acquired an interest in a $1.7bn portfolio of convenience retail assets leased to BP Australia. The investment is via a $137m equity interest.

The company will divest five non-core retail assets to fund the investment, for a total consideration of $117m. It also intends to divest a further $100m in non-core assets to maintain gearing in the middle of its target range of 30-40%.

FY20 operating earnings guidance has also been upgraded to growth of 2.2%. The distribution pay-out ratio forecast is 90-95% of operating earnings.

Credit Suisse maintains a Neutral rating and increases the target to $4.27 from $4.23.

Sector: Real Estate.

Target price is $4.27.Current Price is $4.59. Difference: ($0.32) – (brackets indicate current price is over target). If CQR meets the Credit Suisse target it will return approximately -7% (excluding dividends, fees and charges – negative figures indicate an expected loss).

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