22 February 2018 11:03
Investor Relations' Perspective business The stock

IGD’s stock price rises more than 33% in 2017

IGD’s stock price rose 33.1% in 2017, significantly outperforming both the Italian index and the European sector index which closed the year at period highs of +15.5% and +9.3%, respectively.

The generalized sell-off that hit stock markets in February 2018, triggered by concerns about the more restrictive US monetary policies, caused a sudden correction and resulted in IGD’s stock trading at a noticeable discount to both the consensus target price and the 2017 NAV. The performance of IGD’s stock was in line with the Italian stock exchange through 16 February 2018, while it largely outperformed (by around 15 percentage points) the European real estate index which returned to the levels seen at the beginning of 2017.

Source: Bloomberg data compiled by IGD

In 2017 stock markets, in general, benefitted from a low interest rate environment and rising business profits. The performance of IGD’s stock, more specifically, was supported by the company’s solid fundamentals. Beginning in October, the rise in the price accelerated as it began to seem more likely that the investment universe of the Piani Individuali di Risparmio or PIR would be expanded to include the real estate sector as the result of an amendment to Law 232/2016 (which instituted the PIRs). The amendment was, in fact, included in the Italian government’s Stability Act.

There was then a price correction – in part physiological after an uninterrupted really of almost six months – in the second half of December following the announcement of IGD’s upcoming capital increase. The stock then traded in a range of between €0.95-1.00 in January.

In the first part of February, stock prices overall were penalized by concerns about the Federal Reserve’s tightening of the monetary policy in light of possible inflationary pressures. IGD’s stock was not immune to the generalized sell-off.

At current levels – €0.841 at the close on 16 February– IGD’s stock is trading at a discount of more than 39% against the broker’s consensus price of €1.17 and of around 63% against the EPRA Triple NAV of €1.37.