Analyzing Retail REITs: Upgraded Outlook for Tanger, Downgraded Expectations for Kimco and ROIC
Portfolio Pulse from Lekha Gupta
BofA Securities analyst Jeffrey Spector updated ratings for several retail REITs following a Retail Executive Summit. Acadia Realty Trust (AKR) was upgraded to Buy with a price target of $20, reflecting a positive growth outlook. Tanger Inc. (SKT) was upgraded to Neutral with a price target of $31, due to a strong platform and balance sheet. Kimco Realty Corporation (KIM) was downgraded to Neutral with a price target of $20, following less accretion from its acquisition of RPT Realty. Retail Opportunity Investments Corp. (ROIC) was downgraded to Underperform with a price target of $12, due to higher risk from dilutive acquisitions.
April 05, 2024 | 5:52 pm
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NEGATIVE IMPACT
Kimco Realty Corporation was downgraded to Neutral with a price target of $20, following less accretion from its acquisition of RPT Realty.
The downgrade to Neutral and the decrease in price target for KIM are due to less accretion from its acquisition of RPT Realty than initially expected, which could dampen investor enthusiasm and negatively impact the stock price in the short term.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
NEGATIVE IMPACT
Retail Opportunity Investments Corp. was downgraded to Underperform with a price target of $12, due to higher risk from dilutive acquisitions.
The downgrade to Underperform and the decrease in price target for ROIC are based on the higher risk associated with its dilutive acquisitions and smaller opportunity sets for growth, which could lead to negative investor perception and a decrease in stock price.
CONFIDENCE 85
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Acadia Realty Trust was upgraded to Buy with a new price target of $20, reflecting a positive growth outlook and potential upside to FY24 guidance.
The upgrade to Buy and the increase in price target for AKR are based on its leading internal growth outlook and potential upside to FY24 guidance, which could attract investor interest and drive the stock price up in the short term.
CONFIDENCE 85
IMPORTANCE 80
RELEVANCE 90
POSITIVE IMPACT
Tanger Inc. was upgraded to Neutral with a price target of $31, due to a strong platform, balance sheet, and increased earnings visibility.
The upgrade to Neutral and the increase in price target for SKT reflect the company's successful efforts to improve assets and increased earnings visibility, which could lead to positive investor sentiment and potential stock price appreciation.
CONFIDENCE 80
IMPORTANCE 75
RELEVANCE 85