Morgan Stanley has upgraded its price target for Charter Hall, to $16.88 from $13.10, on anticipation of stronger funds inflows as investors are increasingly appreciating the unique characteristics on offer.
Given low interest rates, Morgan Stanley believes the flow of capital into property, both listed and unlisted, is here to stay, with Charter Hall benefiting from it.
The analysts do concede there are risks attached to the model in the form of asset values with fundamental challenges remaining for Office and Retail, in particular if/when interest rates were to lift higher. Morgan Stanley is not worried at this stage.
Rating remains Overweight alongside an In-Line industry view.
Sector: Real Estate.
Target price is $16.88.Current Price is $13.94. Difference: $2.94 – (brackets indicate current price is over target). If CHC meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).