Gaston89 escribió:MS - IRSA
We increased our PT from US$20 to
US$25 (+40% return) based on a reduction
of discount to NAV (~50% to ~40%), driven
by : 1) increasing demand for residential and
commercial real estate; 2) a prospective
increase in capital availability for real estate
through a tax amnesty program; 3)
government initiatives to spur investment
We do not know if IRSA will get building
permits for Solares in BA; however, it could
be transformational and likely worth far
more than the market thinks. Permitting
should add US$ 13/share to IRS landbank.
IRSA owns 68% of IDBD, which is
currently going through bankruptcy
protection proceedings and has a debt load
of +US$6bn. IRSA has so far invested north
of US$545mm into IDBD. We ascribe zero
value to IDBD, given the opaqueness and
uncertainty of the value creation
opportunity in this investment.
Price Target $25
All cases below use Net Asset Value analysis. Major assumptions include 1) FX of 16.9 ARS
per USD, 2) a 7.3% Portfolio Cap Rate, 3) Lipstick (NYC Office Building) Ground Lease
Capitalized at 4%.
Bull $45
30% Discount to Bull Case Net Asset Value
We are valuing the mall assets at 7.5% and the office assets at 8.5%. Even in the bull case
we assume an important discount to NAV of ~30% due to the complexity and
transparency issues, but we assume a higher asset valuation driven by Solares de Santa
Maria's permits being approved, and also we assume that IRSA recovers US$545 of equity
value (similar to the capital invested) from IDBD. We arrive at an NAV almost US$ 62 and
apply a ~30% discount to arrive at US$45.
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