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Peel Hunt upgrades Unite, starts covering GCP Student Living, Empiric Student over ‘back to school’ prospects

Analysts are cautiously optimistic that it might be more ‘business as usual’  than initially feared

Unite Group - Peel Hunt upgrades Unite Group PLC, starts covering GCP Student Living PLC, Empiric Student Property PLC over ‘back to school’ prospects

Unite Group PLC (LON:UTG) was upgraded to ‘add’ from ‘hold’ by Peel Hunt over increased expectations that university students will go back to school for the 2020/21 academic year.

The broker also initiated coverage for GCP Student Living PLC (LON:DIGS) and Empiric Student Property PLC (LON:ESP) with ‘hold’ and ‘buy’ recommendations, respectively.

READ: Berenberg downgrades Unite over expected collapse in international students

Analysts said that fears of remote teaching, a dearth of overseas students and widespread uncertainty now look “misplaced” as 97% of universities are planning to provide in-person teaching come the autumn.

“Of course, a lot can happen between now and September, and offers of places and accommodation reservations are not confirmation of ‘bums on seats’, but we are cautiously optimistic that it might be more ‘business as usual’  than initially feared,” the broker commented.

The target price for Unite, which remains the market leader, was bumped up to 1,000p from 900p.

Target prices for GCP and Empiric were set at 130p and 75p respectively.

“Strategies (and fortunes) have differed over their public lives, with growing pains affecting performance at Empiric. GCP, on the other hand, has delivered double-digit accounting returns through its externally managed structure,” analysts noted.

“Over the past few years Empiric has worked hard to address shortcomings and create a proprietary platform and brand – we think this is an important evolution.”

Shares in Unite and GCP dipped 1% to 922p and 122.4p respectively, while Empiric rose 1% to 59.1p on Tuesday morning.

Quick facts: Unite Group

Price: 959.5 GBX

LSE:UTG
Market: LSE
Market Cap: £3.82 billion
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