Bond.az - Goldman Sachs upgraded Segro PLC (LON:SGRO) from Neutral to Buy on Monday and raised its price target to £9.00 from £8.00, citing strong letting momentum despite rising vacancy rates in the UK logistics market.
The $13.25 billion market cap company has maintained dividend payments for 47 consecutive years. It delivered £23 million of new headline rent in Q1 2026 and captured 19% reversion, down from 36% in FY2025. Segro has approximately £49 million in reversion still to be captured by 2027.
Pre-letting activity was strong in Q4 2025, with Segro securing approximately £16 million, its strongest quarterly performance since Q1 2024. The company signed a further £12 million of pre-lets in Q1 2026, predominantly driven by data centre-related transactions. With a P/E ratio of 17.86 and revenue growth of 7.56%, Segro maintains a solid financial health.
Segro targets one to two fully fitted data centre developments per year, with Goldman Sachs maintaining capex assumptions at £725 million in 2027 and £775 million by 2028. The company’s EPRA cost ratio stood at 17.5% in FY2025.
The loan-to-value ratio stood at approximately 31% in Q1 2026, supported by £106 million of disposals completed during the quarter and a further £138 million exchanged expected to complete over the remainder of 2026. UBS recently downgraded Segro from Buy to Neutral but raised its price target from GBP8.15 to GBP8.40.
