BMO’s Jenny Ma downgraded Inovalis to “underperform” from “market perform” with a
$3.50 target, down from $5.25.
“We had identified Inovalis’ high weighting to Orange as a notable risk factor for a long time. As at Q2/22, Orange comprised 28 per cent of Inovalis’ total revenue. The Canadian REIT sector has not seen a departure of this proportional magnitude in recent memory. Taking into account Orange’s vacancy, all else equal, we estimate Inovalis’ occupancy rate drops dramatically to 62 per cent from 82.6 per cent at quarter-end Q2/22,” she said.