British real estate sector underperforms a broadly stronger equities market, after Goldman Sachs downgrades three major stocks to "neutral" from "buy" on macro concerns following recent share price outperformance.
Shares in British Land Company lose 1.25 percent in heavy trading volume, trading 84 percent of its 90 day average volume by 0937 GMT after being downgraded by Goldman.
"We believe positive catalysts (both at the macro and micro level) have passed or faded for now," Goldman analysts say in a note. They also downgrade Great Portland and Land Securities Group , shares in which lose 2 percent and 0.65 percent respectively.
"Following significant share price outperformance and our forecast of a temporary near term slowdown in growth, we remove GPE from our Conviction Buy List and downgrade the stock to Neutral. We also downgrade British Land and Land Securities from Buy to Neutral reflecting similar factors though to a lesser degree," the note says.
However, Hammerson shares rise 0.74 percent after their "buy" rating was reiterated in the note. Big Yellow Group , a "conviction buy," rises 1.3 percent.
Land Securities, Hammerson and British Land trade on a forward 12-month price-to-earnings (PE) of more than 17 times, according to Thomson Reuters Starmine Smartestimates of top-rated analysts in the sector. That compares with FTSE 100
on 11.4 times forward 12-month PE.
British Land's market implied 5-Year earnings per share compound annual growth rate of 5.4 percent is lowest among its peers, with Land Securities on around 7.2 percent and Hammerson on 9.6 percent, according to Starmine Data.
Forward 12-month earnings forecasts for Land, Hammerson and British Land have been cut by around 0.5 percent over the last 30-days, according to Starmine.
Reuters messaging rm://email@example.com
Keywords: MARKETS EUROPE STOCKSNEWS