On Tuesday, Compass Point maintained its Buy rating on Kimco Realty Corp (NYSE:KIM) shares with a steady price target of $28.00. The firm highlighted Kimco's potential to benefit from the recent shift in fund flows towards real estate investment trusts (REITs), following the start of the rate easing cycle.
Kimco's shares have shown strong performance since June but experienced some volatility over the past week. This fluctuation was attributed to diminishing interest from Blackstone (NYSE:NYSE:BX) concerning a return on invested capital (ROIC) in North Carolina.
Kimco has demonstrated its acumen in acquisitions, having recently made accretive purchases of Weingarten Realty (NYSE:WRI) and Retail Properties of America (NYSE:RPAI) (RPT). With a robust financial standing, Kimco is poised to continue making significant single asset acquisitions. The company is also expected to leverage its joint venture with GIC, which focuses on grocery-anchored shopping centers, to engage in larger, strategic, and accretive transactions.
The firm's analysis points out that Kimco's stock offers compelling value, trading at a substantial discount compared to the broader REIT index and its sector peers, despite having similar growth projections for 2024.
Moreover, Kimco has recently joined the ranks of A-rated REITs by one of the three major rating agencies. Despite this achievement, its shares are trading at a lower multiple than other A-rated REITs, such as Simon Property Group (NYSE:NYSE:SPG), which Compass Point also highly recommends.
The report concludes by underscoring Kimco's liquidity, balance sheet strength, long average debt maturities, and significant valuation discount relative to other prominent REITs. These attributes, according to Compass Point, are the ingredients that often lead to stock market outperformance, suggesting a positive outlook for Kimco's shares in the market.
In other recent news, Kimco Realty successfully issued $500 million in notes due in 2035, a strategic move to bolster its financial position. This development was followed by an increase in the company's second-quarter earnings, prompting an updated 2024 estimated funds from operations (FFO) from $1.59 to $1.61. Kimco Realty also upsized its unsecured term loan to $550 million, with the proceeds earmarked for general corporate purposes.
In response to these recent developments, Citi raised its price target for Kimco from $20.00 to $24.00, maintaining a Neutral rating. Meanwhile, Mizuho downgraded Kimco from Outperform to Neutral, despite raising its price target to $23.00. On the other hand, Raymond James upgraded Kimco's stock from Market Perform to Strong Buy and set a new price target at $25.00.
These developments reflect recent analyst insights from firms such as Citi, Mizuho, and Raymond James. The adjustments in ratings and price targets are based on Kimco Realty's recent financial performance, including its earnings results and strategic financial maneuvers. These are recent developments and, as always, actual results may vary.
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