UBS Likes Servcorp, But Plenty of Risk in FY15 -- Market Talk...

UBS Likes Servcorp, But Plenty of Risk in FY15 -- Market Talk

0030 GMT [Dow Jones] UBS raises its price target for serviced office provider Servcorp (SRV.AU) by 7.1% to A$6.05/share and retains a buy call, after a positive 1Q trading update pointed toward a 10% increase in capacity in FY15 and a 15% rise in net profit. Analyst Doug Macphillamy notes, however, there are still plenty of headwinds about. "While momentum remains solid and a stronger U.S. dollar is supportive, we note Southeast Asia is still getting back on track, the weak yen will be a drag and there remains an element of risk around costs/occupancy for the 9 new floor openings being rolled out in FY15," he says. FY16, however, remains a big opportunity for the company, with significant new leases starting to contribute to the bottom line including Mayfair Place in London and the World Trade Center in New York, Macphillamy says. SRV last traded at A$5.64. ([email protected]; @dwinningWSJ)