Panmure Liberum has raised its target price for Foresight Environmental Infrastructure (LSE:FGEN) to 92p from 73p, citing progress across the fund's growth investments.
The broker maintained its buy rating, with the new target implying a 12-month total shareholder return of 18% from a closing price of 85.2p.
It was responding to annual results showing a 6.5% net asset value total return for the year to 31 March, which it described as resilient against peers.
Panmure Liberum said the return had been helped by strong operating performance from the fund's anaerobic digestion assets and early progress in extending their working lives.
The broker said investors were increasingly recognising the fund's points of differentiation, including cash yields comparable to core UK renewables peers and materially lower gearing.
It noted the fund did not need to sell assets to manage leverage, with gearing of 29% and net debt of about 1.9 times earnings.
Panmure Liberum highlighted the three growth investments, biomethane refuelling network CNG Fuels, Norwegian aquaculture asset Rjukan and cannabis-cultivation site The Glasshouse, which will be assessed for sale over the next two to five years.
It said CNG Fuels was progressing well, with revenue up 39% to £134 million and a swing to positive earnings of £6.7 million.
The broker estimated the three growth assets could generate cumulative value of around £73 million, equivalent to 14.5p a share.
It added that life extensions across the anaerobic digestion portfolio, alongside growth-asset delivery, could substantially offset structural erosion in net asset value over at least four years.
Panmure Liberum said disclosure had improved materially since its December re-initiation, particularly at the fund's May capital markets day, giving greater confidence in long-term cash generation.
The broker's raised target rests on a reinvestment-adjusted dividend discount model, with the uplift driven mainly by higher assumed value from reinvestment.
It pointed to a target dividend of 8.04p, which at the midpoint of guided cover implied an attractive free cash flow yield of around 12%.
