In starting up new coverage on 24 REIT stocks and a single real estate functioning enterprise, Credit score Suisse analyst Tayo Okusanya rated WeWork (NYSE:WE) at Outperform as the flexible do the job house firm “is properly positioned to choose benefit of the structural demand from customers motorists for the flex workplace market, as we perspective Get the job done From Home as a long-tailed overhang to desire for common business room.” The stock is gaining 5.7% in Thursday premarket investing.
He expects cost-free income movement to turn good in Q3 2023 and accelerate in 2024 as funds expenditures on actual physical web sites declines and the firm’s advancement system shifts from capex-intense traditional leases to asset-mild bargains, which have to have noticeably less or no capex.
The company’s initial-mover benefit and international scale also works in its favor, Okusanya stated. He sees working leverage as key to WeWork (WE) attaining profitability, “driven by declining SG&A ($50M yearly discounts focus on), normalizing spot opex (renegotiating lease conditions), and an stop to restructuring costs ($50M-$100M remaining).”
The analyst’s Outperform score clashes with Seeking Alpha’s quant process, which has a Solid Offer on the stock thanks to weak profitability and EPS revision scores. By distinction, SA Authors’ regular score is Hold. In the meantime, the ordinary Wall Road analyst rating stands at Robust Buy.
To get a wide assortment of sights on the stock, search at the bearish get of SA contributor Felix Fung and the bullish evaluation of SA contributor WideAlpha.