After several months of deep discounts and a flurry of analyst downgrades, the real estate investment trust (REIT) stocks bottomed in mid-October and have been moving higher since.
Even as REITs rebounded over the past month, many analysts were reluctant to upgrade them until recently. But with the consumer price index (CPI) and producer price index (PPI) slightly better over the past two weeks, analysts are starting to take an interest in the REIT sector.
Here are three REITs that have received analyst upgrades over the past few weeks:
Prologis Inc. (NYSE: PLD) is an industrial REIT based in San Francisco that owns and manages industrial logistics properties throughout the United States and 18 other countries. Founded in 1983, Prologis has led the way in appreciation among REIT stocks. While Prologis has an annual dividend of $3.16, it’s more growth-oriented and a 2.8% annualized dividend yield that is typically much lower than other REITs in the peer group. .
From October 2017 to April 2022, Prologis grew by approximately 210%. Very few REITs match that performance. But the rate hike pushed Prologis’ share price from $174 to as low as $98 in mid-October. It recently closed at $113.65.
On October 17, Scotiabank analyst Nicholas Yulico upgraded Prologis from Sector Performance to Sector Outperform but still lowered his price target from $137 to $116. At the time, Prologis was trading around $105. Other analysts recently restored Prologis Buy and Overweight ratings 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 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. The $1.89 Forward from Operations (FFO) easily pays a $0.96 annual dividend and currently yields 4.4%.
On November 9, Bank of America Securities analyst Craig Schmidt upgraded the Kite Realty Group Trust from Neutral to Buy, and raised 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 for cold storage of food for supermarkets, food manufacturers 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 multifaceted network looks like this:
On November 3, Americold Realty Trust released its third quarter results. FFO was $0.29 per share, higher year-over-year and above analysts’ view of $0.04, but the company missed analyst expectations in terms of revenue is 1.3%.
However, on November 14, Bank of America Securities analyst Joshua Dennerlein upgraded the Americold Realty Trust from Neutral to Buy and raised his price target from $27.50 to $33.5. In June, Dennerlein also upgraded the Americold Realty Trust from Underperforming to Neutral. No other analyst will upgrade it in 2022.
Americold Realty Trust has a 52-week range from $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 the Americold Realty Trust has increased its dividend by 57% over the past 5 years.
REIT investors will expect to see more analytical upgrade reports in the coming months, especially for companies that can continue to improve their FFO numbers.
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