CDL Hospitality Trust (CDREIT) has caught my attention after slumping from $1.19 on 31 Jul to close $1.03 on 31 Aug. After taking into account of $0.0251 dividend per share ex on 4 Aug, it is still down 11.6% for the month, notching a multi-month low despite a likely buoyant 2HFY23F. Let’s take a closer look on why CDREIT has caught my attention.
Firstly, why did it drop 12% in Aug?
The drop in CDREIT’s share price may be attributed to three main reasons, viz.
- a) 1HFY23 results missed some analysts’ estimates
1HFY23 results released on 28 Jul missed some analysts’ estimates. As a result, some analysts have trimmed their earnings estimates for CDREIT. For example, Morgan Stanley reduced their target price from $1.00 to $0.95 and reiterated an underweight / in-line call. Daiwa Securities also reduced their target price from $1.25 to $1.10 and reiterated a hold call.
- b) U.S. bond yields soared in August
U.S. bond yields jumped from 3.957% on 31 Jul to a high of 4.354% on 21 Aug (which is also...