Against the background of the second closure, Maayan Beck-Merom, National Analyst Partner, Grants to the stock
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The “excess return” recommendation, with a target price of 306.8 per share, reflecting an upside of about 18% on the base price of the stock this morning.
According to her, “Big is the largest and highest quality player in Israel in the field of open shopping centers. The company shows good results during the corona period due to the nature of the assets, which is a relative advantage in light of morbidity levels. We believe this trend will continue in Big’s results Therefore, we soften our base scenario, which predicts a loss of income in the Group’s commercial properties in relation to the comparative companies in the field of commercial real estate.
According to the review, “The company’s redemption data in Israel are good and indicate the buyers’ preference for open commercial properties in the current health environment – redemptions rose in May-June, after the closure was released, by an average of 11%. “At the beginning of the second wave, Big reported an increase of 6.5% compared to the same period this month. The company also reduced the value of its assets by an additional NIS 224 million in the first half, when it is a relatively negligible amount.”
Leumi’s baseline scenario for damage to commercial properties and offices is based on an interim scenario between the effects of the 2008 recession and the 2001-2003 recession on each sector. “In light of the good redemption data of open properties in Israel during the Corona period and since the rent and rental load on these properties is also significantly lower than in closed properties, we estimate that the damage to open properties will be less significant. In light of this, we chose to soften the forecast “NOI in 2021 will be about 15% and from there the yield will increase at a low single-digit rate every year.”
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