Today, Farmland (NYSE:FPI) Partners Inc., a real estate investment trust specializing in farmland, announced the completion of a significant asset transaction. The company has sold a portfolio of 46 farms, which includes 41,554 acres spread across eight states, for an aggregate purchase price of $289 million. The buyer is Farmland Reserve, Inc., a Utah-based nonprofit corporation.
This transaction, which took place on Monday, involved properties located in Arkansas, Florida, Louisiana, Mississippi, Nebraska, Oklahoma, North Carolina, and South Carolina. The sale is part of Farmland Partners Inc .'s strategic initiatives to optimize its portfolio.
In addition to the sale details, the company has also filed unaudited pro forma consolidated financial statements. These statements reflect the company's financial position as of June 30, 2024, and its operations for the six months ending on that date and for the year ended December 31, 2023, after giving effect to the transaction.
The financial statements, which provide insight into the impact of the sale on the company's financials, have been filed as Exhibit 99.1 with this Current Report on Form 8-K and are incorporated by reference.
Farmland Partners Inc. is listed on the New York Stock Exchange under the ticker symbol NYSE:FPI. The company's executive offices are located in Denver, Colorado.
In other recent news, Farmland Partners Inc. has announced the sale of a large portfolio consisting of 46 farms, a transaction valued at $289 million. The sale is expected to reduce the company's debt by $140 million and potentially finance share buybacks. Roth/MKM has reaffirmed a Buy rating on Farmland Partners, citing an attractive net asset value and strong asset value.
The company has reported mixed financial results with a net loss of $2.1 million in Q2 2024, but a positive adjusted funds from operations (AFFO) of $0.5 million. The projected AFFO for 2024 is estimated to be between $9.8 million and $12.8 million.
Farmland Partners has also welcomed Dr. Bruce Sherrick, an agricultural economist, to its Board of Directors. Meanwhile, B.Riley analyst has revised the stock price target for Farmland Partners from $12.50 to $11.50, keeping the stock's rating at Neutral.
InvestingPro Insights
Following Farmland Partners Inc.'s (NYSE:FPI) significant asset sale, InvestingPro data provides additional context for investors. The company's market capitalization stands at $546.4 million, reflecting its current market valuation after the transaction. Despite the sale of a substantial portion of its portfolio, FPI maintains a dividend yield of 2.17%, which may interest income-focused investors.
InvestingPro Tips highlight that management has been aggressively buying back shares, suggesting confidence in the company's future prospects even after this large divestment. Additionally, FPI is trading at a low P/E ratio relative to near-term earnings growth, with a PEG ratio of 0.7, potentially indicating an undervalued stock following the asset sale.
It's worth noting that FPI's revenue for the last twelve months as of Q2 2024 was $57.39 million, with a slight decline in revenue growth of -2.09%. This data, combined with the recent asset sale, may prompt investors to closely monitor how the company plans to reinvest proceeds and maintain growth.
For those seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide deeper insights into FPI's financial health and future outlook following this strategic move.
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