The Point for Europe

Research evidence excerpt

The Point for Europe

Gecina (GFCP.PA) - A dislocation most likely to resolve to the upside

We reiterate our Buy rating and update estimates on Gecina following strong H1

results that confirm a positive in rental growth for its prime Paris office portfolio.

The stock offers a rare public-to-private market valuation arbitrage, trading at a

deep discount to NAV relative to the positive strength of the Paris office rental

market and as the real estate cycle moves past its trough. We believe Gecina is

well-positioned to benefit from office market polarization and growing demand

from Paris’s emergence as an AI hub. While we trim our price target to €109 to

reflect temporary investment market softness caused by the Middle East conflict,

our estimates remain significantly above consensus. We expect a resumption of

the growth cycle to drive substantial share price upside, with an attractive

dividend yield providing strong downside support.

Aaron Guy | Aakanksha Anand | Temitayo Olayinka

UK Water Utilities - Reopeners Opportunity

Ofwat will publish its Draft Determination (DD) on its Cost Change, more widely

known as Reopeners, which we expect week commencing 3rd of August. In Figure

1, we outline listed water utilities' submissions in aggregate, the categories which

they fall under, and align company announced numbers on a similar basis

(real/nominal). We expect Ofwat to deliver its DD and Final Determination (FD) on

2022/23 prices basis. Of the three listed water utilities, SVT and PNN both

requested in-period revenue adjustments - with PNN stating that it's a must, while

UU appears less reliant. We expect SVT and UU to receive more of their request

than PNN, given its poorer operational track record and PCD delivery, potentially

having to pare back its ask.