Barclays Upgrades Hammerson to Overweight, Citing Stronger Growth Outlook

Barclays double-upgraded UK retail property group Hammerson (LON: HMSO) to Overweight from Underweight and lifted its price target for the stock to 330 pence from 260 pence.

The bank’s analysts told investors that the company’s growth profile “now screens well” and its shares look attractively valued compared to peers.

In a research note published Friday, Barclays analyst Eleanor Frew said they see potential for further acquisitions, stating that the company’s increasing scale should see its cost ratio decline. 

Barclays believes the company’s current cost structure and operational platform are too large for its current asset base.

As a result, while noting that the stock is more expensive than its retail peers, Barclays believes Hammerson's valuation is now attractive.

The upgrade comes less than six months after Barclays cut the stock to Underweight, citing recession risks and a less compelling valuation at the time.

The move adds to a growing list of recent bullish calls on Hammerson. Peel Hunt upgraded the shares to Buy in August with a 350 pence target, while BNP Paribas Exane raised its rating to Outperform in April, arguing that the company was well placed to benefit from stabilising retail property values and rising footfall across key assets.

Although Citi trimmed its price target to 385 pence in July, it maintained a Buy recommendation.