Analysts at Citi made a reduction to their earnings expectations for Australian retail asset manager, Scentre Group (ASX:SCG), estimating it up to the fiscal year of 2025.
This cut is due to the impacts of high interest costs and potential headwinds from high interest rates.
The brokerage has lowered their price target (PT) to A$3.00 from A$3.10, maintaining a neutral rating on the matter.
An expectation voiced by Citi is that the underlying consumer of Scentre’s shopping sites would have remained resolute, benefitting from elevated savings rates during the COVID period in the first half of 2023.
Moving forward, concerns are held about the impact of rising interest rates on affordability for fiscal years 2024 and 2025, with the brokerage projecting negative leasing spreads into fiscal 2025.
Citi has revised its FY23 core net profit prediction downwards by 1.2% to A$1.08 billion, and done the same for FY24 by 2.4% to A$1.19 billion, compared to A$1.04 billion logged in fiscal 2022.
Out of 12 analysts, seven rate SCG as a buy or higher, three hold and two as sell or lower.
Scentre Group has seen a decrease of 4.2% this year as of its last closing, versus a rise of 3.2% in the ASX 200 Real Estate index.
Scentre Group (ASX:SCG) is an Australian-based retail asset management company.