JP Morgan has forecast a positive outlook for Foncière Lyonnaise (Paris).
The investment bank predicts that the property company’s strategy of targeting Haussman buildings and taking on debt to increase its portfolio by 30% could see FL shares in line for a premium.
FL is currently trading its shares at a 9% discount from its net revalued assets, while its rival Unibail is trading with a 1.6% premium. However, the discount is less than the average discount for shares in the sector, which average out at 19%, despite the fact its net assets potential for revaluation is generally less than that of other European property companies, according to JP Morgan.
Cash flow multiples for FL are predicted to surpass Unibail by 21.7 times the 1999 forecast or 6.4 points more. Meanwhile, cash flow is poised to grow by 15.9% per annum compared to Unibail’s 12.5% growth rate.
Les Echos, 13 December 1999, page 39
