Morgan Stanley released a research report raising WHARF REIC's (01997) target price by 12.5% from HK$20 to HK$22.5, while maintaining its "Underweight" rating. Morgan Stanley continues to await meaningful and sustained recovery in Hong Kong's retail and office sectors.

The investment bank raised its earnings per share forecasts for the company's FY2025-2027 by 4%, 4%, and 1% respectively, primarily reflecting: 1) rental adjustments for retail and office properties being less negative than expected; 2) lower interest cost projections; 3) improved debt profile due to continued deleveraging efforts.

However, Morgan Stanley remains cautious about Hong Kong retail, mainly due to changing consumption patterns, increased outbound travel in the second half of 2025, and rising unemployment rates. Conservatively, the firm forecasts the company's final dividend for FY2025 at HK$0.6, unchanged year-on-year, with full-year dividend at HK$1.26, representing a 1.6% year-on-year increase.