Morgan Stanley: Lower target price of SWIRE PACIFIC A (00019) to 71 Hong Kong dollars, rating downgraded to "in line with the market"

Morgan Stanley released a research report stating that it has lowered the target price of SWIRE PACIFIC A (00019) by 5.3%, from 75 Hong Kong dollars to 71 Hong Kong dollars, and downgraded its rating from "hold" to "in line with the market". Morgan Stanley raised its earnings forecast for the company by 6% for 2025, 4% for 2026, and 3% for 2027, however, due to a lack of catalysts, the stock's net asset value (NAV) historical average discount is only 30%. Therefore, Morgan Stanley has widened the discount from 20% to 30% due to limited upside potential and downgraded its rating. Morgan Stanley stated that the profit recovery of CATHAY PAC AIR (00293) has already been fully evident, however, profitability has reached its peak due to global trade frictions. Due to stable real estate business, Morgan Stanley predicts that Swire's earnings per share dividends in 2025 could increase by 4%, with a forecasted dividend yield may decrease to 5%, lower than its peers. Swire's share repurchase ended in May this year, with valuation still attractive, but with no near-term catalysts.