Unibail-Rodamco-Westfield Earnings: Revenue Bounces, but More Disposals Required to Reduce Debt

No-moat Unibail-Rodamco-Westfield posted 2023 adjusted recurring EPS up 3.3% to EUR 9.62, driven mainly by the ongoing recovery in retail and office rents, and lower expenses. That growth was despite EUR 1 billion in asset disposals in 2023 (about 2% of URW’s asset portfolio). Our 2024 adjusted recurring EPS estimate of EUR 9.73 is at the midpoint of management’s guidance range of EUR 9.65 to EUR 9.80 per share, with earnings growth likely to once again be strong enough to offset asset disposals in 2024. Disposals may include EUR 1 billion of assets where management is in active discussions with buyers. URW remains committed to a “radical reduction” of exposure to the EUR 9.5 billion of U.S. assets, or about a fifth of its entire property portfolio.