Aroundtown SA Maintains Positive Outlook Despite Rating Downgrade

First Berlin Equity Research GmbH has updated its analysis of Aroundtown SA, confirming a "buy" recommendation with a target price of €4.0. Despite the downgrade of Aroundtown's credit rating by Standard & Poor's (S&P) from BBB+ to BBB, analyst Ellis Acklin remains optimistic about the company's potential for growth. S&P anticipates that a struggling German economy could impact Aroundtown's property divestments in 2025 and its capacity to meet the leverage prerequisites for an elevated rating.

The company's debt-to-capital ratio, which was 52.1% at the end of 2024, is a key factor. Although this is a drop from 55.5% in March 2024, it still exceeds S&P's 50% threshold for a BBB+ rating. However, the minimal market reaction to the downgraded rating suggests that it was already expected. Aroundtown's management retains flexibility, which could prove advantageous. The assessment implies an optimistic outlook, attributing a 54% potential upside despite current challenges.