Berenberg lowers Assura to 'hold' following 'opportunistic' placing
Analysts at Berenberg lowered real estate firm Assura from 'buy' to 'hold' on Thursday, stating the group's "opportunistic" share placing would stress dividend cover.
Berenberg said Assura's placing, which raised £185m at a price of 77p per share on Tuesday, highlighted the attractiveness of government-backed income in what was likely to remain "uncertain times".
However, the German bank noted that with the group's balance sheet already "conservatively geared", market investment volumes likely to remain low and asset acquisition opportunities likely to be delayed owing to ongoing Covid-19 disruption, its analysts were questioning the necessity, size and timing of the placing.
"Although the placing is circa 3%-accretive to net asset value, we expect it to be earnings-dilutive and add pressure to dividend cover in the short term," said Berenberg, which also reiterated its 75p target price on Assura.
"We remain attracted by the security of income on offer, yet following a significant share price re-rating, we downgrade Assura to hold."