On Friday, Scotiabank reiterated its Sector Outperform rating on Rexford Industrial Realty, with a steady price target of $55.00. The firm's analysis follows a recent tour of 12 South Bay properties, highlighting Rexford's significant presence in the area.
Rexford Industrial Realty, which trades on the NYSE under the ticker NYSE:REXR, has been recognized for having a portfolio that stands out in functionality compared to local competitors. South Bay represents the company's largest submarket by Annual Base Rent (ABR), accounting for 20.3%, and is second by Gross Leasable Area (GLA) with 14.9%, trailing only Inland Empire West.
The brokerage's assessment underscores Rexford's resilience against general market statistics that may exaggerate rent and vacancy challenges. Given the size of the market, approximately 2 billion square feet, and Rexford's ownership of about 2% (50 million square feet), the firm anticipates that Rexford's carefully selected portfolio will surpass the broader market's performance.
The properties visited, including four redevelopments at various stages of completion, showcase Rexford's strategic focus on functional real estate assets. This focus is expected to provide an advantage as the company navigates the market.
Scotiabank's position on Rexford is based on the belief that the company's unique portfolio and management approach will enable it to outperform the general market. This outlook remains unchanged following the detailed property tour conducted last week.
In other recent news, Rexford Industrial Realty reported significant growth in the second quarter of 2024, with substantial increases in funds from operations (FFO) per share and net operating income (NOI).
The company's leasing activity and property occupancy rates also showed considerable improvement. These developments were followed by JPMorgan's upward revision of Rexford's price target to $52, maintaining a neutral stance on the stock. The adjustment came after a thorough review of the company's Q2 earnings.
On a different note, Regional Express Holdings (Rex), an Australian airline, is reportedly considering the appointment of Ernst & Young as administrators due to financial distress. This move comes after the airline's pre-tax loss of A$2.1 million for the first half of the fiscal year 2023/24. The Australian government has expressed its readiness to support Rex, emphasizing the importance of maintaining air services in rural areas.
Analysts from Evercore ISI and JPMorgan have hinted at potential growth in Rexford's financials, with Evercore raising its price target to $55 from $54. However, Mizuho Securities and Baird have reduced their price targets to $50 and $49 respectively, maintaining a neutral rating.
InvestingPro Insights
To complement Scotiabank's positive outlook on Rexford Industrial Realty (NYSE:REXR), recent data from InvestingPro provides additional context for investors. The company's market capitalization stands at $11.03 billion, reflecting its significant presence in the industrial real estate sector. Rexford's revenue growth has been robust, with a 19.93% increase over the last twelve months as of Q2 2024, and an even stronger quarterly growth of 21.36% in Q2 2024. This aligns with Scotiabank's view of Rexford's resilience and potential to outperform the broader market.
InvestingPro Tips highlight Rexford's financial strength and growth potential. The company has raised its dividend for 11 consecutive years, demonstrating a commitment to shareholder returns. This is particularly noteworthy given the current dividend yield of 3.42%. Additionally, analysts anticipate sales growth in the current year, which supports Scotiabank's positive stance on the company's prospects.
It's worth noting that Rexford is trading at a high P/E ratio of 45.27 (adjusted for the last twelve months as of Q2 2024), which may indicate investor confidence in future growth. However, this also suggests that the stock is priced at a premium compared to its peers.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips that could provide deeper insights into Rexford's investment potential.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.