KeyBanc has reiterated an Overweight rating with a $60.00 price target on SITE Centers Corp. (NYSE: NYSE:SITC), following the company's second-quarter earnings of 2024.
The firm provided updates to its estimates and sum-of-the-parts valuation for both SITE Centers and Curbline Properties (CURB).
SITE Centers' shares outperformed the Strips, a sector benchmark, until June 30, showing an 8.3% increase compared to a 2.5% decline for the Strips.
However, the stock did not join the broader market upswing experienced by Strips and REITs after a weaker-than-expected Consumer Price Index (CPI) report on July 11.
Investor interest in SITE Centers has been heightened due to an upcoming corporate action. Current shareholders of SITE Centers are poised to receive two shares of CURB stock for every share of SITE Centers they own when the spin-off is completed on October 1, 2024.
KeyBanc noted that for those interested in investing in CURB at the time of the spin-off, holding SITE Centers shares could be an effective strategy.
The firm anticipates that CURB will start trading on a when-issued basis on September 26, 2024, and that the final distribution price is yet to be determined. It is expected that trading may be thin and potentially volatile initially.
The analysis further suggests that following the spin-off, SITE Centers might trade at a discount to its net asset value (NAV) due to possibly reduced institutional investor interest. However, strong execution on dispositions at better than expected pricing could provide some support for the stock price.
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