Citi predicts strong earnings growth at Shaftesbury Capital

(Sharecast News) - Citi has reiterated its 'buy' rating on London-focused property investor and developer Shaftesbury Capital ahead of its interim results in a few weeks, predicting that profits will nearly double over the medium term. Ahead of the company's results for the first six months of 2024 due on 30 July, Citi said it was lifting its price target for the stock by 41%.

"Increasing cyclical confidence and continued recovery from pandemic impacts we estimate, drives c80% EPS growth over five years and around 55% NAV growth," the bank said in a research note.

"In addition, as the real estate cycle grows in confidence and the company reports evidence of progress to our estimates, the current stock valuation, near historic low levels, should re-rate to higher multiples on our higher estimated valuation metrics."

The stock has performed broadly in line with the wider FTSE 250 index since the start of the year, rising by just 7.7%. By 0900 BST, the shares were up 1.5% at 148.3p.