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Deutsche Bank downgrades Workspace on valuation
Workspace was in the red on Tuesday as Deutsche Bank cut its stance on the stock to 'hold' from 'buy' following a 20% rally in the share price since the end of February.
The bank said the downgrade was purely on valuation grounds, noting that Workspace trades in excess of a 12% premium to last reported net asset value per share, and only a 5% discount to DB's one-year forward estimated 2019 NAV per share of 1,200p.
The bank kept its 1,200p target price unchanged, saying it reckons that the structural growth story and fundamentals are intact, but on a spot basis.
"At our TP, Workspace shares only imply an 8% one-year total shareholder return and thus we downgrade to hold."
Downside risk would be a deterioration in the UK due to a worse-than-expected Brexit impact, while upside risk would be improving office take-up, especially in the serviced office/flexible space sector.
At 1300 BST, the shares were down 2.2% to 1,115p.