After several months of deep price declines and an avalanche of analyst downgrades, real estate investment trust (REIT) stocks bottomed out in mid-October and have been trading higher ever since.
Even as REITs have been bouncing back over the past month, many analysts have been reluctant to upgrade them until recently. But with slightly better consumer price index (CPI) and producer price index (PPI) numbers over the past two weeks, analysts have started warming up to the REIT sector.
Here are three REITs that have had analyst upgrades in the past few weeks:
Prologis Inc. pld is a San Francisco-based industrial REIT that owns and manages industrial logistics properties in the US and 18 other countries. Founded in 1983, Prologis has been a leader in appreciation among REIT stocks. Although Prologis’s annual dividend of $3.16 is more growth than the income-oriented, and its annual dividend yield of 2.8% is generally well below other REITs in its peer group.
From October 2017 to April 2022, Prologis grew by approximately 210%. Very few REITs match that performance. But interest rate hikes drove Prologis’ share price down from $174 to $98 in mid-October. It recently closed at $113.65.
On October 17, Scotiabank analyst Nicholas Uliko upgraded Prologis from Sector Perform to Sector Outperform but still lowered his price target to $116 from $137. At the time, Prologis was trading around $105. Other analysts have recently reinstated a Buy and Overweight rating on Prologis while estimating target prices as high as $140.
Kite Realty Group Trust KRG is an Indianapolis-based retail REIT with open-air and mixed-use properties from Vermont to California. Its strip malls are mostly grocery store-anchored. Other tenants include CVS Pharmacy Inc., The Fresh Market, Best Buy Company Inc., Burlington, Ross Stores Inc. and Costco Wholesale.
Kite Realty recently declared a dividend of $0.24 per share, up 9% from the previous quarter. The $1.89 forward fund from operations (FFO) easily covers the $0.96 annual dividend and currently yields 4.4%.
On November 9, Bank of America Securities analyst Craig Schmidt upgraded Kite Realty Group Trust from Neutral to Buy, as well as raising his price target from $22 to $25. The 52-week range is $16.42 to $23.35, and the most recent close was $21.62.
americanold realty trust inc. cold is a storage REIT that uses advanced technology to cold store food for supermarkets, food producers and international food and beverage organisations. It has 249 locations with different temperature zones. Its motto is, “From farm to fork and every step in between.” Its multidimensional network looks like this:
On November 3, Americanold Realty Trust delivered its third quarter operating results. FFO of $0.29 per share was higher year-over-year and exceeded analysts’ views by $0.04, but the company missed analysts’ expectations on revenue by 1.3%.
Nevertheless, on November 14, Bank of America Securities analyst Joshua Dennerlin upgraded Americold Realty Trust from Neutral to Buy and raised his price target from $27.50 to $33.50. In June, Dennerlein also upgraded Americold Realty Trust from Underperform to Neutral. No other analyst has upgraded it in 2022.
Americanold Realty Trust’s 52-week range is $21.49 to $33.50. Its recent closing price was $28.95. The annual dividend is $0.88, and the current yield is 3.03%. Another positive is dividend growth, as Americold Realty Trust has increased its dividend by 57% over the past five years.
REIT investors should be expecting to see more analyst upgrades in the coming months, especially on companies that can continue to improve FFO numbers.
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