How does this earnings outlook compare to peer performance and the broader European property sector?

Earnings outlook vs. peers

EPH’s guidance that it will return to net‑profit territory in H1‑2025 marks a clear swing from the loss‑warning it issued in its last update. In the context of the European real‑estate arena, most listed peers are still reporting either flat earnings or modest declines. Unibail‑Rodamco, Klepierre and Covivio have all warned of “soft‑footed” rent‑growth and are projecting a 2‑5 % EBITDA contraction YoY for the first half of 2025, while the UK‑focused landlords (Landsec, British Land) are still battling higher funding costs and are only pencilling in breakeven net results. Consequently, EPH’s profit‑recovery forecast is relatively bullish – it suggests the company is either benefiting from a more aggressive portfolio re‑balancing, lower debt servicing costs, or a stronger exposure to resilient asset classes (e.g., logistics and residential). Relative to the sector, which is currently trading at a 12‑month average EV/EBITDA multiple of ~7.5x, EPH’s implied multiple (≈6.5x based on its forward profit estimate) appears modestly discounted, implying a potential valuation edge.

Market dynamics, technical picture & trading implications

The broader European property sector remains under pressure from persistently elevated borrowing rates and cautious tenant sentiment, keeping price momentum muted (the STOXX Europe 600 Real Estate index is down ≈4 % YTD). However, the sector’s dividend yields have stabilized around 5‑6 % and forward‑looking credit spreads have narrowed slightly, indicating a tentative improvement in risk appetite. Technically, EPH’s shares have been trading in a tight 5‑day range around €1.85, with the 20‑day SMA now providing support and the RSI hovering near 45 – a neutral stance but with upside bias if earnings beat materializes.

Actionable take‑away:

- Long bias on EPH if the stock is trading below its 20‑day SMA and the forward EV/EBITDA discount widens beyond 15 % versus the sector average. Target a 7‑10 % rally to €2.00‑€2.10, aligning with the sector’s recent support zone.

- Risk management – place a stop‑loss just below the 20‑day SMA (≈€1.78) to guard against a broader sector pull‑back if rate‑hike expectations intensify.

- Relative positioning – consider a “pairs trade” by going long EPH and short a peer that remains in loss‑warning mode (e.g., Klepierre), capitalising on the earnings divergence while neutralising sector‑wide beta.

Overall, EPH’s profit outlook is more optimistic than its peers and the broader European property market, offering a modest valuation upside if the company delivers the promised turnaround.