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
.43 was -12% vs. Q4/08's
.49, handily exceeding RBC CM’s
.37E and consensus
.32. Two-thirds (~
.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.