JPMorgan downgrades Hammerson, cites deteriorating consumer outlook

JPMorgan Cazenove downgraded shares of shopping centre owner Hammerson on Wednesday to ‘underweight’ from ‘neutral’, citing a deteriorating consumer outlook and higher borrowing cost risk.

The bank, which cuts its price target on Hammerson to 29p from 40p, said refinancing risk remains limited near term, but Hammerson is worse positioned in terms of loan to value, debt maturity and pricing power than JPM's coverage universe.

"With LTV at 47%, we believe near-term disposals will continue to dominate HMSO’s narrative, but these could prove harder to execute given the outlook for investment liquidity," it said.

JPM cut its FY22/23 earnings per share estimates by 20% - in line with its estimates for Klepierre and Unibail-Rodamco-Westfield - due to higher disposals and deteriorating retail sales assumptions.

At 0945 BST, Hammerson shares were down 4.9% at 30.62p.