Hammerson Downtrend Expected to Continue as Analysts Struggle to See How it Evolves From Here

Hammerson (LON: HMSO) shares face further downside, according to Barclays analysts in a note this week. 

The bank downgraded the stock from Equal Weight to Underweight and cut its price target to 245p from 295p amid concerns about the company's limited capacity to fund growth and its unattractive cash flow profile.

“We struggle to see how the company evolves from here,” Barclays said in a note to clients, citing Hammerson’s high cost ratio and constrained investment potential. 

The firm had previously maintained a more neutral stance, pending clarity on how the real estate group planned to tackle these structural challenges. 

However, with “little headroom to invest,” Barclays analysts now see a weaker outlook.

The bank flagged Hammerson’s reported net debt-to-EBITDA of 5.8x at the end of 2024 as “optimistically calculated,” noting it includes income from eventual disposals and deducts net debt based on those same sales. 

When incorporating planned capital expenditures and the company’s ongoing share buyback programme, Barclays concluded that debt levels “already start to look stretched.”

Although the bank models £400 million of joint venture stake acquisitions at yields of around 8%, it notes that these are debt-funded.

Barclays believes they add income and lower the cost ratio, but “drive leverage metrics to an unattractive level.” 

Barclays estimates Hammerson’s cost ratio could fall from 39.9% in FY24 to 34% by FY29E, but warns the financial trade-off remains unfavourable.

Shares in Hammerson have declined 11.4% so far in 2025 and over 17% in the past six months.