On Wednesday, B.Riley raised the stock price target for Alpine Income Property Trust (NYSE: PINE) to $20.00 from $19.50, while maintaining a Buy rating on the stock. The firm's analyst projects a positive outlook for the company, anticipating a potential increase in the bottom-line forecast or a full-year 2024 performance that could surpass management's expectations.
The analyst's optimistic stance comes despite Alpine Income Property's significant increase in its 2024 per share guidance, which was announced alongside its second-quarter 2024 earnings.
The upward revision in the price target reflects an expectation of continued strong performance, even considering factors such as growing property operating expenses, an increase in disposition activity in the second half of 2024, and the timing of acquisitions leaning towards the fourth quarter.
The analyst acknowledges that while tenant credit might present a challenge due to the company's small size and resulting tenant concentration, this is expected to have a diminishing effect on the current year's results. Still, looking ahead to 2026, the analyst notes potential headwinds from the refinancing of a significant portion of the company's outstanding debt and the maturing of various loan investments.
Specifically, Alpine Income Property has a $100 million term loan maturing in May 2026 with a fixed interest rate swap at 3.65%. Given the current long-term yield trends, there is a possibility that refinancing in 2026 could be dilutive. Moreover, the maturing loan investments, which yield an average of 10.2%, may be challenging to replicate with new lease investments or other loans in a normalized rate environment.
Despite these future concerns, the analyst predicts a 4.2% decrease in the company's adjusted funds from operations (AFFO) per share in 2026. Nonetheless, even with this decrease, the firm views the real estate investment trust (REIT) as trading at an attractive multiple of 10.7 times AFFO per share. In light of these factors, the firm reiterates its Buy rating and adjusts the price target upwards to reflect the positive outlook.
In other recent news, Alpine Income Property Trust has seen some significant developments. The company has extended its initial management agreement with Alpine Income Property Manager, LLC until January 31, 2025, ensuring continuity in the management of its real estate portfolio. In the financial sphere, Alpine reported a 13.9% increase in Funds from Operations (FFO) per share in the first quarter of 2024, reaching $0.41 per share.
Meanwhile, the company has sold a $13.6 million A-1 participation interest in a $23.4 million loan investment, reducing its investment in the loan to roughly $9.8 million. This move is part of a broader strategy to manage its investment portfolio and maintain financial flexibility.
Research firm Stifel has maintained a Buy rating on Alpine Income Property Trust's stock, adjusting the price target to $18.00 from $18.75 following a review of the company's loan investment portfolio.
Stifel also revised its estimates for Alpine's adjusted funds from operations (AFFO), lowering the 2024 forecast to $1.61 from $1.64, and the 2025 estimate to $1.58 from $1.63, while maintaining the 2026 estimate at $1.58. These recent developments provide insights into the company's ongoing operations and strategies.
InvestingPro Insights
B.Riley's upgrade of Alpine Income Property Trust's price target to $20.00 aligns with several key metrics and InvestingPro Tips that highlight the company's financial health and market position. Notably, the company's management has been proactively buying back shares, demonstrating confidence in the company's value and future prospects.
Moreover, Alpine Income Property Trust has a track record of rewarding shareholders, having raised its dividend for the past five consecutive years. This commitment to returning value is further underscored by the company's current dividend yield of 6.37%, as of mid-2024.
InvestingPro Data shows a market capitalization of $256.7 million, indicating the size and scale of the company within the real estate sector. The revenue growth for the last twelve months as of Q2 2024 stands at 5.44%, with a gross profit margin impressively high at 84.2%, suggesting efficient management of operating costs and a strong market position.
The stock is trading near its 52-week high, with a price that is 97.52% of this peak, reflecting investor optimism and market sentiment that may be factoring into the recent price target adjustment.
For investors looking to delve deeper into Alpine Income Property Trust's financials and market performance, there are additional InvestingPro Tips available, providing a comprehensive view of the company's potential. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, and gain access to these valuable insights.
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