Strong Farm Income and Asset Appreciation Makes Farmland Partners Attractive, Says Analyst
Portfolio Pulse from Shivani Kumaresan
Raymond James analyst Buck Horne has reiterated an Outperform rating on Farmland Partners Inc (FPI) and increased the price target from $14 to $15. Despite a 10% year-over-year drop in agricultural commodity prices, U.S. farmers are experiencing strong profitability, with 2023 expected to be the third-highest year for farm income in a decade. FPI has repurchased over 11% of its shares year-to-date at $11/share and announced a special dividend of $0.21/share. The company has also completed property dispositions worth $71.1 million this quarter, with a year-to-date total of $122 million. FPI is executing a $190 million capital recycling program to leverage the difference between public valuation and private market value. Lease renewals in 2023 have seen an 18% increase year-to-date. With $163.1 million in available liquidity, FPI is well-positioned to maintain its dividend. The analyst estimates FPI's Net Asset Value/share at $16, indicating a 20% discount on the current share price, with the target price reflecting a 10% discount to NAV. FPI shares are up 1.65% at $12.97.
December 26, 2023 | 6:51 pm
News sentiment analysis
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POSITIVE IMPACT
Farmland Partners Inc (FPI) has received a positive analyst rating with a raised price target, indicating strong farm income, asset appreciation, and a solid financial strategy with share repurchases and property dispositions. The company's shares are trading at a discount to the estimated NAV, suggesting potential for growth.
The positive outlook from the analyst, including the raised price target and the strong financial indicators such as share repurchases, special dividend, and property dispositions, suggest a bullish sentiment for FPI. The company's shares trading at a discount to NAV further supports the potential for price appreciation in the short term.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100