GPT Group's FY23 funds from operations (FFO) were in line with Morgan Stanley's forecast, while FY24 guidance for 32cpu beat the 31.4cpu expected by consensus.

The higher FFO guidance is driven by trading profits at Sydney Olympic Park, explain the analysts, while the a lower dividend of 24cpu (consensus 25.1cpu) is due to incentives in office and a lower distribution from the GPT Wholesale Office Fund (GWOF).

While partly due to incentives, the broker highlights office occupancy increased to 92.3% from 88.5%.

Morgan Stanley suggests office cash flows will be challenged due to incentives and capex, and maintains an Equal-weight rating. Target $4.60. Industry view: In-Line.

Sector: Real Estate.

Target price is $4.60.Current Price is $4.55. Difference: $0.05 - (brackets indicate current price is over target). If GPT meets the Morgan Stanley target it will return approximately 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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