UBS has upgraded Challenger Diversified Property Group (ASX:CDI) to Buy from Neutral on the back of better-than-expected FY13 results. The result was driven by significantly reduced operational expenses, buy-back accretion and underlying portfolio growth. The broker has upgraded the stock given the discount-to-valuation and NTA as well as a 7.3% dividend yield. UBS notes that CDI has had a good track record of meeting/exceeding guidance despite difficult operating conditions. The price target is therefore raised to $2.75 (current price $2.55). Similarly, JPMorgan rates the company's profit as a solid result in a tough market. The broker favours CDI's 7.3% yield and 7% discount to NTA, however, notes that the 12.8% of income will roll-off when leases expire in 2015. Furthermore, CDI will be looking to sell some assets, which will dilute earnings. J.P.Morgan maintains a Neutral recommendation on CDI with a price target of $2.67.