Invest Securities confirms its buy rating on Covivio shares, with a downward revision of its target price from 61 to 54.6 euros.

The research firm reports that Covivio reported revenues up +7.6% on a like-for-like basis, thanks to very strong organic growth in hotel revenues (+20%) and continued strong growth in German residential rents (+3.8%).

The signals we are sending out are encouraging, but further improvement in occupancy in H2 is not guaranteed", stresses the analyst, who points out that the sharp rise in financial expenses has led to stable net income (E2.36/share).

Refinancing conditions in the first half of the year testify to the Group's sound balance sheet (the 2023 RNR guidance has been slightly raised by +2.4% (420mE) and the dividend (3.75E) still looks sustainable for the next three years, summarizes Invest Securities.

Nevertheless, 'the company could be forced to cut its dividend in 2026 or 2027 (3.33E according to our estimates). The yield would nevertheless remain well above 6% on the basis of the current share price', concludes the broker.

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