TSX:IIP.UN - Post Discussion
Post by
retiredcf on May 15, 2024 8:01am
Scotiabank
Scotia’s Mario Saric bumped his InterRent REIT target to $14.50 from $14.25 with a “sector outperform” rating. The average is $14.95.
“IIP has notably lagged peers and sector post the Federal government’s March 20th NPR announcement (down 14 per cent vs. down 9 per cent and down 5 per cent, we believe due to IIP’s overweight in Ontario/BC but also perceived foreign student overweight,” he said. “The 4.0 times (16 per cent) fall in NTM [next 12-month] AFFO multiple has erased its long-standing premium to BEI/CAR. Looking forward, we expect accelerating year-over-year FFOPU growth should at least stabilize its relative AFFO multiple. Indeed, we think IIP excess FFOPU growth (negative 3.5 per cent vs. peers in Q1) starts in Q2/24 and averages 9 per cent through 2024 and 5 per cent in 2025. We do see decelerated growth in 2025 (CAR is the only Apartment exception), but hitting our 12 per cent should = 15-per-cent-plus unit price growth, ex. potentially interesting capital recycling (IIP accelerated asset sales should kill any concern of required equity financing). IIP has the lowest Apartment PEG (1.4 vs. 2.2 peer avg), in part on lower debt refi headwind. We think the damage is overdone and we are buyers sub-$13/unit.”
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