By Peet Serfontein & Jalpa Bhoolia
NEPI Rockcastle plc provides real estate investment services. The company invests in commercial properties such as malls, parks, shopping centres and offices, serving customers worldwide but with a particular focus on Central and Eastern Europe (CEE).
The group's high-quality portfolio of directly held properties in the CEE region, combined with exposure to select listed and liquid global real estate securities, diversifies the company's risk profile.
Technically, a price in an inclining channel pattern makes for an attractive investment opportunity (see the blue and orange parallel trendlines on the main chart as well as the insert).
The pattern shows a consistent uptrend, characterised by a series of higher highs and higher lows. The lower boundary of the channel acts as a support level, while the upper boundary acts as resistance. When the share consistently bounces off the support level and trends upward, it reinforces bullish sentiment.
The share is in a markup phase, indicating a period of rising prices and increased investor optimism. This phase typically follows an accumulation phase and is characterised by strong buying interest and positive sentiment, often leading to significant price appreciation as demand outpaces supply.
According to the RSI (Relative Strength Index), the stock will be overbought at ~R146, which is also our profit target.
We suggest a medium capital at-risk allocation to this trade. Increase exposure for a break above R134.
Share Information
| Share Code | NRP |
|---|---|
| Industry | Real Estate |
| Market Capital (ZAR) | 86.96 billion |
| One Year Total Return | 27.29% |
| Return Year-to-Date | 8.41% |
| Current Price (ZAR) | 131.59 |
| 52 Week High (ZAR) | 133.74 |
| 52 Week Low (ZAR) | 93.76 |
| Financial Year End | December |
| The current price looks attractive, and several technical indicators underscore further upside potential of the share. The share remains above its 200-day simple moving average. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (EUR) | 0.57 | 0.61 | 0.65 | 0.66 |
| Growth (%) | 7.06 | 5.74 | 1.86 | |
| Dividend Per Share (EUR) | 0.51 | 0.53 | 0.55 | 0.57 |
| Growth (%) | 3.35 | 3.77 | 4.36 | |
| Forward PE (times) | 10.78 | 10.19 | 10.01 | |
| Forward Dividend Yield (%) | 8.06 | 8.37 | 8.73 | |
| Dividend growth is attractive near-term, after which it is expected to taper off. We do, however, see upside risk to medium-term forecasts. | ||||
Buy/Sell Rationale:
Technical Analysis:
Long-term fundamental view:
| Share Name and position | MRP - Take Profit (Close the Position) | DCP - BUY (Continue to hold) | INL - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 157.50 | 32.49 | 120.71 |
| Current | 186.55 | 34.08 | 125.82 |
| Movement | 18.4% | 4.9% | 4.2% |
| We suggest taking profit early on this position to lock in portfolio gains. |
The share is in a developing symmetrical triangle pattern. Muted downside price momentum is supportive. Remains above its 200-day simple moving average.
Our take profit target remains at R37 with a trailing stop-loss level at R32.20. Exit the trade on 1 July 2024. |
A developing rising wedge pattern remains of interest. Fading downside price momentum is positive. Remains above its 200-day simple moving average.
Our take profit target remains at R137 with a trailing stop-loss level at R119. Exit the trade on 29 July 2024. |
| Share Name and position | SHP - BUY (Continue to hold) | BVT - BUY (Continue to hold) |
|---|---|---|
| Entry | 258.45 | 258.00 |
| Current | 265.12 | 257.62 |
| Movement | 2.6% | -0.1% |
|
A price that is in a developing rising wedge pattern remains of interest. Upside price momentum is a highlight. Remains just above its 200-day simple moving average.
Our take profit target remains at R295 with a trailing stop-loss level at R252. Exit the trade on 22 July 2024. |
A price that is in an inclining channel pattern remains of interest. Upside price momentum is supportive. Remains just above its 200-day simple moving average.
Our take profit target remains at R292 with a trailing stop-loss level at R245. Exit the trade on 12 August 2024. |
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