It’s not all bad – Analysts have upgraded these 3 REITs

After several months of deep price declines and an avalanche of downgrades from analysts, real estate investment trust (REIT) stocks bottomed out in mid-October and have been trading higher ever since.

Even with REITs rallying in the past month, many analysts have been reluctant to upgrade them until recently. However, with slightly better Consumer Price Index (CPI) and Producer Price Index (PPI) recorded over the past two weeks, analysts are starting to tune in to the REIT sector.

Here are three REITs that have had analyst upgrades in recent weeks:

Prologis Inc. (NYSE: 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 is a leader in appreciation among REITs. Although Prologis has an annual dividend of $3.16, it is more growth-oriented than income-oriented, and its annual dividend yield of 2.8% is typically well below other REITs in its peer group.

From October 2017 to April 2022, Prologis gained about 210%. Very few REITs matched that performance. But the rate hikes knocked Prologis’ share price from $174 to a low of $98 in mid-October. It recently closed at $113.65.

On Oct. 17, Scotiabank analyst Nicholas Yulico upgraded Prologis from Sector Perform to Sector Outperform but still lowered his price target from $137 to $116. At the time, Prologis was trading around $105. Other analysts recently reiterated Buy and Overweight ratings on Prologis, while predicting price targets as high as $140.

Kite Realty Group Trust (NYSE: KRG) is an Indianapolis-based retail REIT with outdoor and mixed-use properties from Vermont to California. Its strip malls are mostly anchored by grocery stores. Other tenants include CVS Pharmacy Inc., The Fresh Market, Best Buy Co. Inc., Burlington, Ross Stores Inc. and Costco Wholesale.

Kite Realty recently announced a dividend of $0.24 per share, up 9% from the previous quarter. Forward funds from operations (FFO) of $1.89 easily cover the annual dividend of $0.96 and currently yield 4.4%.

On November 9, Bank of America Securities analyst Craig Schmidt upgraded Kite Realty Group Trust from Neutral to Buy, while also 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.

Americold Realty Trust Inc. (NYSE: COLD) is a storage REIT that uses advanced technology to store refrigerated foods for supermarkets, food manufacturers and international food and beverage organizations. It has 249 locations with different temperature zones. Its motto is “From farm to fork and every step in between.” Its multifaceted network looks like this:

American realty trust

American realty trust

On November 3, Americold Realty Trust reported its third quarter operating results. FFO of $0.29 per share was higher year-over-year and beat analysts’ views by $0.04, but the company missed analysts’ revenue expectations by 1.3%.

Still, on November 14, Bank of America Securities analyst Joshua Dennerlein 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.

Americold Realty Trust has a 52-week range of $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 will hope to see more analyst upgrades reported in the coming months, especially on companies that can continue to improve their FFO numbers.

REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it’s too late. Benzinga’s in-house real estate research team works hard to identify the greatest opportunities in today’s market, which you can access for free by signing up to Benzinga Weekly REIT Report.

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