On Tuesday, HSBC revised its rating for TAG Immobilien AG (TEG:GR) stock, moving from a "Buy" to a "Hold" stance, while setting a price target of EUR16.50 for the company's shares.
The change in rating comes despite the analyst's expectation that there will be no significant surprises in the third quarter results. The forecast remains steady, with anticipation that TAG Immobilien will meet its year-end target for its hold portfolio size in Poland, which is set at 3,350 rental units.
The analyst from HSBC predicts that TAG Immobilien's build to hold activities in Poland will persist without signs of slowed execution. This is expected to contribute to the company reaching its year-end target.
Furthermore, the analyst projects that the company will report better unit sales in the second half of 2024 compared to the first half and will experience only a modest decline in valuation during the latter half of the year.
Looking ahead to the company's 2025 guidance, which is typically disclosed with the third-quarter results, the analyst anticipates a more definitive statement regarding the resumption of dividend payments.
However, the expected dividend payout ratio is predicted to be lower than in previous years, aligning with the trends observed among TAG Immobilien's peers. The analyst expects that TAG Immobilien will declare a dividend for 2024 at EUR0.35 per share, which corresponds to approximately a 35% payout ratio.
The HSBC analyst's comments highlight an expectation for a continued stable performance from TAG Immobilien, with a particular focus on the Polish market. The projection includes a dividend payment for 2024, albeit at a reduced ratio compared to the past, indicating a cautious but steady outlook for the company's financial distributions to shareholders.
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