Following a tour of multifamily (MFR) properties in the Netherlands, Raymond James analyst Brad Sturges trimmed his target for units of European Residential REIT to $5 from $5.25, keeping an “outperform” rating. The average is $5.04.
“Potential clarity combined with a more limited future operating impact from any new proposed Dutch regulations may act as a material near-term positive catalyst for ERES’ unit price,” he said. “Further, if ERES’ sizable NAV discount valuation does not narrow, we fully expect ERES’ strategic sponsor and largest unitholder (66-per-cent interest), CAPREIT, to explore its strategic options to unlock ERES’ inherent underlying value, which may include exploring an M&A/privatization transaction, and/or optimize ERES’ capital structure (e.g. increase its trading float).”