On Thursday, Jefferies analysts upgraded EastGroup Properties (NYSE:EGP) stock rating from Hold to Buy and increased the price target to $194.00, up from the previous $174.00.
"We are upgrading EastGroup on exposure to onshoring/nearshoring trends, a consistent track record of outperforming earnings expectations, and strong development leasing strategy," the analysts said.
The analysts pointed out that while valuation concerns have previously limited enthusiasm for EastGroup's stock, the current lower entry point, which reflects a 12.1% decline in stock performance in 2024, combined with anticipated strong future funds from operations (FFO) growth, presents an attractive opportunity for investors. The FFO growth projections are notably positive, with an increase of 8.3% in 2024, 7.6% in 2025, and 11.5% in 2026.
EastGroup Properties is currently trading at its lowest next twelve months (NTM) FFO multiple in five years, standing at 18.4 times. This valuation is considered even more appealing when looking ahead to the company's FFO multiples of 18.0 times for 2025 and 16.1 times for 2026.
EastGroup Properties is a real estate investment trust (REIT) that focuses on the development and operation of industrial properties in major Sunbelt markets throughout the United States.
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