FRANKFURT (dpa-AFX) - According to bank Metzler, it is unlikely to be possible for real estate company Dic Asset to reduce its debt to the desired level in 2023. However, this is important against the background of increased interest rates, wrote analyst Jochen Schmitt in a study available on Friday.

He therefore lowered his investment rating for the stock from "buy" to "hold." Looking at his new price target of 7.60 euros, he still sees room for improvement compared to the current share price of 6.35 euros, but he still cut it by almost 40 percent. Previously, the target had been 12.00 euros.

Dic Asset will have a hard time reducing its leverage ratio LTV - as targeted for this year - to below 50 percent, he wrote. While Dic did manage to reduce its LTV in March from 57.8 percent at the end of December to 57.3 percent now, he said, this was only due to the sale of a larger property.

Even if the ratio is likely to fall by a further two percentage points in the current second quarter due to the placement of own properties into a fund, Schmitt sees little chance of this happening. Rather, a slight decline in portfolio value due to falling property prices is likely to counteract this. His own estimate for Dic's LTV is around 52.5 percent for December.

Moreover, the current environment for disposals remains difficult and, all things considered, Dic Asset has now become "too dependent on market conditions" to meet its LTV target, he added.

Rated "Hold," Bankhaus Metzler expects the company's share price to remain broadly stable over the next 12 months./ck/tih/mis

Analyzing institute Metzler Capital Markets.

Publication of the original study: 12.05.2023 / 07:56 / CEST First disclosure of the original study: 12.05.2023 / 07:56 / CEST