3 Real Estate Stocks Trading At Attractive Valuations As The Fed Is Set To Lower Rates In 2024
Portfolio Pulse from Surbhi Jain
The article discusses the potential benefits for real estate stocks due to the Fed's anticipated rate cuts in 2024. It highlights three real estate stocks trading at attractive valuations: Forestar Group Inc. (FOR), City Office REIT Inc. (CIO), and EPR Properties (EPR). FOR is noted for its land development and sales to builders, CIO for managing office properties in Sun Belt markets, and EPR for investing in experiential properties. The stocks are trading at significant discounts to their sector medians, making them potentially favorable investments in light of expected lower interest rates.
January 03, 2024 | 2:49 pm
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POSITIVE IMPACT
City Office REIT Inc. is trading at a P/AFFO (FWD) of 9.33, around 40% discount to the sector median, with an AFFO Yield (FWD) of 9.59%, making it an attractive investment.
City Office REIT's discounted valuation and high AFFO Yield position it well for capitalization on the expected lower interest rates, which could stimulate office property demand.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 85
POSITIVE IMPACT
EPR Properties trades at a P/AFFO (FWD) of 9.36, nearly 40% below the sector median, with a high AFFO Yield (FWD) of 10.16%, suggesting strong investment potential.
EPR's focus on experiential properties and its attractive valuation metrics could see a boost from lower interest rates, enhancing its appeal to investors.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 85
POSITIVE IMPACT
Forestar Group Inc. is trading at a P/E GAAP (FWD) of 9.45, a 75% discount to the sector median, indicating a strong potential for growth with the anticipated Fed rate cuts.
Forestar Group's significant discount to the sector median and its role in residential community development make it likely to benefit from lower borrowing costs due to expected rate cuts.
CONFIDENCE 80
IMPORTANCE 80
RELEVANCE 90