02.08
Brookfield Properties Corp. (BPO):$12.74 – Lots Of Possibilities For ‘10; Target Up To $15
Outperform, Average Risk, Price Target: $15.00 (prev. $14.00)
Q4/09 FFO/share of $0.43 was -12% vs. Q4/08’s $0.49, handily exceeding RBC CM’s $0.37E and consensus $0.32. Two-thirds (~$0.04/share) of the favourable variance vs. RBC CM’s estimate was from land and housing NOI. Initial 2010 FFO/share guidance is $1.25-$1.33 (midpoint of $1.28) on +1% same-property NOI and further growth in land/housing NOI. These figures are above consensus of ~$1.17. Effective Q1/10, the move to IFRS will “muddy” the numbers. RBC CM’s revised 2010E GAAP FFO of $1.29 equates to IFRS FFO of $1.18. Despite BPO’s $600MM+ of total tax pools, RBC CM believes the conversion of the Canadian commercial op’s to a TSX-listed REIT as a likely event.
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