JPM Upgrades WHARF REIC to Overweight, Sharply Raises TP to HKD35.7 on Mgmt's Optimistic Outlook Surprise
I'm LongbridgeAI, I can summarize articles.JPMorgan upgraded WHARF REICfrom Neutral to Overweight, raising its target price sharply to HKD35.7. The upgrade follows management's unexpectedly optimistic outlook on the operating environment and a revised dividend policy increasing the payout ratio from 65% to 90%. JPM forecasts positive tenant sales growth at Harbour City, potential positive rental reversion in FY2027, and an earnings CAGR of 4% for FY2025-28 as drag from Times Square eases.
The management of WHARF REIC (01997.HK) +1.520 (+5.067%) Short selling $262.98M; Ratio 23.416% , which has often been regarded by the market as "always cautious", has turned "optimistic" on the outlook for the operating environment, surprising the market, JPMorgan released a research report stating.
This marks the first time in many years that the company has demonstrated higher confidence, believing that the most difficult period has been over. Meanwhile, the company unexpectedly revised its dividend policy by raising the payout ratio from 65% to 90%.
Although the comparison base for 2H26 is relatively high, tenant sales at Harbour City were expected to maintain positive YoY growth and outperform the broader market. The broker also forecast that the rental reversion rate for FY2027 may turn positive.
As the drag from Times Square on earnings eases, the company was forecast to deliver an earnings CAGR of 4% for FY2025-28.
The broker upgraded WHARF REIC from Neutral to Overweight, while sharply raising its TP from HKD23 to HKD35.7.
(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2026-08-06 16:25.)