LONDON (ShareCast) - (Sharecast News) - Citi upgraded Capital & Counties on Thursday to 'buy' from 'neutral', although the rating change had nothing to do with the merger with Shaftesbury announced earlier in the week.
The bank said its reinstated price target of 246p offers around 61% total return potential.

"This is based on our view that despite the uncertainty and potential spending squeeze, rate rises and recession risk causing further negative sentiment, we estimate the West End recovers and NAV growth is likely to be strong over our five-year forecast," it said.

"Buying opportunistically through the potential negative sentiment reflected in our 2023E NAV decline is likely to be profitable looking out the other side."

Citi pointed that its recommendation was unrelated to the announced potential merger with Shaftesbury, where it estimates a relatively neutral impact on both CapCo and Shaftesbury NAV but with earnings per share accretion likely for both.

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