Landsec In line - EPS targets reiterated as operational strength shows: FY26 First Take

Research evidence excerpt

Landsec In line - EPS targets reiterated as operational strength shows: FY26 First Take

Neil Green, CFA AC Europe Equity Research

(44-20) 7134-4478 14 May 2026 C A Z E N O V E

neil.d.green@jpmorgan.com

Investment Thesis, Valuation and Risks

Landsec (Neutral; Price Target: 710p)

Investment Thesis

We rate Landsec Neutral owing to the relative upside potential we see compared to the rest

of the sector, as, although potential capex potential is impressive, the bulk of the spend is

from 2026 onwards and the overall size of the balance sheet dilutes positive near-term

London office developments. UK retail has largely repriced and the shares reflect risks

around the wider UK economy, meaning we are Neutral.

Valuation

Our Dec-27 price target for Landsec is based on our total returns-based European Valuation

Model, which takes into account whether a company creates or destroys value. We argue that

companies that have a positive spread between returns and their weighted average cost of

capital (WACC) should trade at a premium to NNAV, whereas those with a negative spread

should be priced below NNAV. We apply this spread to the invested capital, discount back,

and add/subtract to our NNAV forecast to derive our price target.

Risks to Rating and Price Target

Landsec’s share price would be negatively affected by disappointing office rental growth

in London, which would affect the performance of its (standing) office investments and

development pipeline. In addition, a further weakening of the UK retail environment would

affect its property performance, in particular if interest rates/bond yields rise as well. Upside

risks include better-than-expected economic and employment growth, a flattening of the

yield curve or better-than-expected rental growth in London offices.