Grainger Plc (LSE:GRI), the property company, is well-placed to navigate the current macroeconomic challenges, JPMorgan (JPM) believes.
Economic trends such as rising non-discretionary (heating and eating) costs, inflation concerns and potentially higher interest rates are concerning investors and driving share market volatility year to date, the broker noted, adding that these factors played a part in its downgrading sector peer Hammerson to ‘underweight’.
Grainger, however, retains its ‘overweight’ rating as JPM likes the company’s intangible platform, economies of scale and property operating margins.
“As real estate as a service evolves, active management platforms with multifaceted skills (development, leasing, capital markets) will be increasingly valuable, in our view, and we value Grainger’s intangible ‘platform’ at 39p per share,” the broker said.
That valuation contributes to a JPM price target of 370p. Shares in Grainger currently trade at 288p.