Analysts have improved the forecast for the shares of the owner of coworking We Work

Last week, Credit Suisse analysts improved the outlook for the shares of the solutions provider for conscientious Work, WeWork Inc. (WE). The news supported the growth of quotations by more than 15% at the auction on June 29. On June 30, the WE promotion ended at $6.19. WeWork sublets office space, including for freelancers. Since the IPO, the company’s shares have not been viral among investors due to scandals and heavy losses. 

However, some investors became optimistic at the beginning of this year after the last reorganization. So, on June 23, Credit Suisse analysts set an “above market” recommendation for WeWork shares and a target price of $11. According to experts, after the last reorganization, WeWork has the opportunity to take advantage of the structural drivers of demand for the sublease office industry. Credit Suisse believes that remote Work is a long–term trend not directly related to the pandemic. Thus, the need for offices for freelancers will remain in the medium term at least.

At the same time, WeWork has a significant pioneer advantage and a large scale in the coworking segment. Analysts believe that the business will be able to improve its balance sheet and get back to having optimistic free cash flow next year. Positive comments from a large bank became the driver of the growth of WeWork shares. However, at the moment, the company remains unprofitable, although it increased revenue significantly. 

So far, the pandemic has affected the WeWork business – many companies have not yet returned employees to their offices. Some have already warned that they will not do this even after all restrictions. In April, Piper Sandler analysts also presented their optimistic forecast for WeWork. According to their statement, the current workplace utilization rate in WeWork is 63%, compared to 45% during COVID-19, and much higher than in traditional offices, where the utilization rate is still only 35%. By 2023, WeWork’s workload will grow to 85%, and the company can achieve profitability.