After Land Securities Group PLC (LSE:LAND) interim results created some negative "noise", analysts at Stifel trimmed short-term forecasts but highlighted that the shares currently trade at a 33% discount to net tangible assets, offering a near-7% fully covered and growing dividend yield.
While there was a slight reduction in near-term earnings forecasts, this was due to the unusual lease arrangements at Queen Anne's Mansions (QAM), a Westminster office tower that was sold in a deal that realises the value of the outstanding lease, but has an unusual impact on EPRA earnings, while being earnings-neutral.
Long-term expectations are unchanged, Stifel said, maintaining a ‘buy’ rating and flagging that 2028 forecasts are unchanged, with 8.5% growth in that year and the expectation that the company will achieve the 6% growth in the following years.
"In our view, management is likely taking a conservative view with its guidance, and we would not be surprised to see further upgrades in the future."
Stifel said the group’s strategic shift – in short, diversifying away from its former office and retail portfolio to one balanced by a third new sector of residential-led mixed-use schemes – should reduce portfolio volatility without sacrificing returns.
Looking further forward outside the scope of the forecast horizon, management fact increased its guidance for 2030 EPS to 62p, up from previous guidance of 60p, which would be a compound annual growth rate of 6.5% from 2027.
"Given the company's significant restructuring plans," the analysts said, "we see this target as eminently achievable."