Supermarket Income Reit Share Discussion Threads

[chucko1] 12/4/2024 11:44

Imagine if you were a client of Jeffries who had bought on the basis of previous target price and commentary (as above). (though more fool you).

What I suspect has happened is that they changed methodology - fine - but they used a rate determined more centrally (i.e. they have a view on rates from Treasury or Fixed Income department) which is quite bearish. Both of those are fine, but an unmanaged combination of the two leads to this fiasco.

[noiseboy] 12/4/2024 11:31

Bunch of clowns!

[orinocor] 12/4/2024 11:25

LOL!!!!

Supermarket REIT rated a 'buy' on robust balance sheet and dividend guidance
Published: 15:49 14 Mar 2024 GMT

Tesco store
Supermarket Income REIT PLC (LSE:SUPR, OTC:SUPIF) has been given a positive evaluation from Jefferies following the fund's half-year 2024 earnings report.

Jefferies maintained a ‘buy’ recommendation on the stock, with a price target of 90p.

Commenting on the 6.06p dividend per share (DPS) target laid out by Supermarket REIT, analysts said: “We forecast the dividend to be fully covered by the financial year 2024 due to continued rental uplifts for the group as mentioned by management with DPS increasing year on year by a moderate 1%.

“Additionally, we forecast a slowdown in both acquisitions and disposals for FY 24-26 with acquisitions being made on an opportunistic basis.”

Supermarket REIT’s balance sheet remains “relatively robust”, said Jefferies, “with LTV (loan to value) of 33% as of 31 Dec 2023”.

Its shares were swapping for 74.5p in Thursday afternoon trade.

[jpatara3] 12/4/2024 11:20

This is the same Jefferies a month back put out a BUY recommendation on SUPR. "Supermarket REIT rates are 'buy' in robust balance sheet and dividend guidance"I would not make investment decisions based on advisors that chop and change faster than the British weather. I have more faith in the met office getting the weather forecasts right.

[kinbasket] 12/4/2024 11:17

I was in Sainsbury this morning and the man next to me at the bread counter said he couldn't decide between the wholemeal and the sourdough now that Jeffries has moved to a DCF model.

[chucko1] 12/4/2024 11:03

So here is the stated reason:

Jefferies has moved (actually - REVERTED BACK) from an NAV model to a DCF model. This has caused a drop from 90p to 60p. They stated that the V (in NAV) was relevant in 2022/23 owing to the plunge in (V)aluations etc.

God only knows what discount rate they elected to use, but a change can cause any valuation change you care to mention. A TP of 60p, as previously mentioned, results in a yield of 10%+ - but TSCO33 bonds yield 5.2%. Figure that one out. Also, 850bps over linkers???

All that is relevant is the usefulness of the yield - even the current 8% is stated (by Atrato) to result in a 12% IRR (long run). So, if like me, you own this for the long run, one could only logically buy more this morning.

So it's not ASDA, it's not the movement in rates (per se), it's not leverage, it's not a profits warning, it's not something corporate - it's a change in methodology. I wonder how much that change will effect the future cashflows??!!

[chucko1] 12/4/2024 10:05

Indeed. A lot of his pronouncements, at least recently, have been quite "excitable". But until I see his specific argumentation (if it was a rates argument, why not downgrade a lot more [unless has has/is in the process of]?), it is difficult to say much more.

[elsa7878] 12/4/2024 09:48

This was the guy who said British Land was worth 250 late last year when it was at 300. Where is it now...385.

[chucko1] 12/4/2024 09:37

Mike Prew at Jefferies is very well seasoned (old?), and respected (so said). That said, he has made dramatic statements before (and quite recently) that have not come to pass. For instance, back in 2017, Brexit would cause a "crash" in London property rents. More recently that PE would be taking over many REITs that would struggle.

I imagine he is a bear on rates, which is a reasonable stance. But to get such a low price and hence div yield, would require UK 10yr above 5% in near perpetuity. Perhaps he does not understand the shape of the forward curve in both rates and inflation. I am absolutely sure that Atrato do!

[killing_time] 12/4/2024 09:25

Nice round number. would also put SUPR on a dividend of 10.1%

[garbetklb] 12/4/2024 09:21

It would be v interesting to see Jeffries' rationale......

[chucko1] 12/4/2024 09:17

I am told Jefferies cut the target share price to 60p. Savage!

[killing_time] 12/4/2024 08:48

That was yesterday mcjack

[mcjack] 12/4/2024 08:46

Ex-dividend today of 1.515p which will partly explain the drop.

[chucko1] 12/4/2024 08:42

I added 25% to what was already my largest stock holding (though was larger a week back). Asda can go up in smoke, and in doing so, their 2% of SUPR's portfolio is then likely desirable to a rival.

All this on a second day of moderate Gilt rally.

[cwa1] 12/4/2024 08:29

I've decided to add a few on this dip, though it is a touch disconcerting to see how unloved it is this morning, so not going TOO deep...

[langland] 12/4/2024 08:25

2 stores I believe- from looking at the map.

[orinocor] 12/4/2024 08:17

Asda is only 2% of the portfolio

[elsa7878] 12/4/2024 08:10

Asda worries? Edit - only 2% of rent roll...

[spectoacc] 12/4/2024 08:08

Lol same here - assume a d/g somewhere?

[belgraviaboy] 12/4/2024 08:08

Unloved this morning

[cc2014] 12/4/2024 08:08

Hmm. Down so much I had to check the day of the week.

[jong] 11/4/2024 11:08

XD today. 1.515p per share payable on Thurs 16th May.

[cwa1] 10/4/2024 15:28

Indeed. Was hoping for a bit of a dip in the share price pre-XD and they obliged earlier on when the US futures crashed on poorer than anticipated inflation figures.

Picked up a wodge at 75p which seem reasonable value to me

Fingers crossed now...