UPDATE: ISI Group Upgrades Brookfield Office Properties to Neutral, Raises PT on Cash Flow Boost

In a report published Monday, ISI Group analyst Steve Sakwa upgraded the rating on Brookfield Office Properties BPO from Cautious to Neutral, and slightly raised the price target from $17.00 to $17.50. In the report, Sakwa noted, “We are upgrading BPO to Neutral and raising our PT to $17.50 from $17 due to an uptick in our cash flow based valuation metrics due largely to the company's large and accretive debt refinancing in 1Q. In addition, last week we raised our NAV valuations on lower IRR hurdle rates, and given BPO's above average leverage its equity valuation disproportionately benefitted from that exercise. Since we took BPO to Cautious in January, the stock has been a modestly underperformed vs. the REITs with the increase in asset values and cheap debt offsetting a lack of leasing news in Downtown NY.” Brookfield Office Properties closed on Friday at $18.00.