Broker: CGS International
Date of Report: July 28, 2026
Excerpt from CGS International report.
Report Summary
Stock Focus: CapitaLand Ascott Trust (CLAS SP)
Action: ADD (Buy/Accumulate)
Target Price: S$1.13
Current Price (at report): S$0.91
Upside: 24.2%
Dividend Yield (FY26F): 6.7%
Key Highlights & Investment Thesis:
- Call to Action: Maintain ADD. CLAS offers a stable FY26F dividend yield of 6.7% with a target price of S\$1.13, indicating significant upside potential.
- Results: 1H26 distribution per unit (DPU) was in line at 2.53 Scts, accounting for 41% of FY26F forecast. Distributions are expected to remain stable through FY26-28 despite near-term headwinds from asset enhancement initiatives (AEI) and asset divestment / acquisition mismatches.
- Portfolio Resilience: Geographic diversification offset weaknesses in specific markets (UK, Japan). Australia and US performance remained strong, with US student accommodation occupancy above 95%.
- Transition & Outlook: FY27F is expected to see reversal of transitional drags, including new contributions from Somerset Clarke Quay and lower electricity costs. Cavendish London Hotel’s ramp-up is a 2028 story. Downside risks include FX rates and global travel demand.
- ESG Leadership: CLAS is recognized as best-in-class on ESG metrics within its sector, aiming for 100% green certification by 2030. ESG progress could further support re-rating.
Peer Comparison: CLAS’s forward yield and valuation metrics are competitive among S-REITs in the hospitality sector, supporting its investment case.
Summary Call: Investors seeking stable income and potential upside should ADD CapitaLand Ascott Trust, with a target price of S$1.13 and a robust yield profile.
Above is an excerpt from a report by CGS International. Clients of CGS International can access the full research report from the broker’s website.
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