Broker tips: LondonMetric Property, Fullers, Zegona Communications

(Sharecast News) - Analysts at Berenberg cut their target price on LondonMetric Property from 282p to 252p on Wednesday after trimming their net tangible asset forecasts, citing a lower‑than‑expected FY26 valuation outcome and a higher cost‑of‑capital backdrop. Even so, Berenberg reiterated its 'buy' rating on the stock, noting the shares still offer value with a dividend yield of around 7% plus growth.

Berenberg described LondonMetric's FY26 results as "mixed", with underlying earnings per share of 13.5p and a 12.45p dividend both in line with expectations, but net tangible assets per share of 200.6p coming in about 4% below consensus. Softer like‑for‑like valuation growth of 0.8% and around £43m of one‑off costs linked to its acquisition of Urban Logistics REIT were the main drags.

Operationally, Berenberg said LondonMetric continues to perform well, highlighting 19% rent‑review uplifts, strong income visibility from contractual uplifts worth £38m over two years, 98% occupancy and a long 17‑year weighted average unexpired lease term. Gearing has risen, with loan-to-value at 36.7% and net debt to EBITDA at 7.5x, though Berenberg said it expects both to ease over time.

Looking ahead, Berenberg said LondonMetric still has "plenty of wood to chop", but remains well positioned to deploy capital into accretive logistics and convenience assets. It pointed to opportunities to scale Premier Inn exposure, fund M&S developments at yields "starting with a six", and reduce concentration risks in tenants such as Ramsay and Merlin. Longer‑term structural support could also come from defined‑benefit pension funds exiting direct real estate.

The German bank also noted progress toward a formal offer for Picton Property Income, which would add a £320m industrial‑heavy portfolio and £24m of net cash. Berenberg sees the deal as low‑risk, earnings‑accretive and supportive of LondonMetric's logistics strategy.

Following the FY26 update, Berenberg lifted its FY27-30 EPS forecasts by up to 3% but cut NTA estimates by 4% to 5% due to the lower starting point. Despite the reduced target price, it said the valuation remains attractive given the income yield and growth prospects.

Shore Capital has reiterated its 'buy' rating on Fuller, Smith & Turner following last week's results from the pub group, saying that the company's growth potential isn't reflected in the current share price.

Results for the 12 months to 28 March released on 10 June showed a 5.7% increase in revenues, with all parts of the business performing well and delivering positive like-for-like sales growth, while adjusted pre-tax profit jumped 28% year-on-year.

Figures were ahead of market estimates, leading to Shore Capital to raise its FY27 earnings per share forecasts by 6%, representing 11% year-on-year growth, adding that there is scope for further upside going forward.

"LFL growth the starter, further margin opportunity for main course and capital deployment the dessert. We expect these three courses to leave investors well sated with double-digit annual EPS growth, which is yet to be fully factored into market estimates, along with building asset value," the broker said in a research note.

FSTA shares surged following the results, rising 14% on the day of the release to 748p, but have since erased some of those gains, finishing Tuesday's session at 682p.

"Despite the well merited subsequent pop in the share price on the results day, we believe this opportunity is yet to be reflected in the current valuation, and continue to see a roadmap to over 1,100p per share on a two-year view," Shore Capital said.

Canaccord Genuity lifted its price target on Zegona Communications to 2,500p from 2,150p, saying the turnaround at Vodafone Spain was gathering pace and the business was now showing clear signs of renewed revenue growth.

Canaccord Genuity said Zegona has been "swiftly improving" margins and cash flow since acquiring Vodafone Spain, with the return to top‑line growth the final piece of the puzzle. Third‑quarter momentum carried into the full‑year results, with its subscriber base continuing to expand across fixed broadband and mobile, extending an 18‑month run of positive net adds.

FY26 revenues of €3.63bn beat expectations, with growth accelerating to 2% year‑on‑year in the fourth quarter. Adjusted EBITDAaL came in at €1.34bn, slightly ahead of forecasts and equivalent to a 37% margin, while gross free cash flow reached €714m, though reported FCF was held back by working‑capital, refinancing and restructuring one‑offs. Net debt of €3.2bn was in line with expectations, and Canaccord said a likely refinancing later this year could reduce annual interest costs to around €180m.

The Canadian bank also noted easing competitive pressure in Spain, particularly from MasOrange, which has recently lost mobile subscribers and slowed broadband growth following its ownership change. Vodafone Spain, by contrast, has been steadily rebuilding its low‑ and mid‑tier offerings without damaging average revenue per user.

Canaccord said Zegona's current 15x CY27 enterprise value-to-free cash flow multiple represented an "unwarranted" 27% discount to European incumbents such as Telefónica and Orange. Its new £25 target was based on 20x CY27 EV/FCF, in line with peers, and includes £1.50 per share for Zegona's minority stakes in the PremiumFiber and FiberPass joint ventures.