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As an investor, it’s always exciting to see positive news about one of your stocks that could potentially increase its price. The news could be a dividend increase, a good earnings report, a new product, service or alliance, or an upgrade from a prestigious brokerage or bank analyst.
Four real estate investment trusts (REITs) received analyst upgrades this week. Three of the four are expected to have significant upside from current share price levels to meet their new price targets. Check it out:
Equity in residential construction
Equity in residential construction Equity Residential, Inc. (NYSE:EQR) is a Chicago-based REIT that owns or invests in 299 apartment communities with 79,688 units in 12 larger and more affluent cities including Boston, New York, Washington, D.C., Seattle, San Francisco and Denver. The occupancy rate as of May 2024 was 96.5%. Equity Residential has been a member of the S&P 500 since 2001.
On April 23, Equity Residential reported its first-quarter 2024 operating results. Funds from operations (FFO) of $0.93 per share beat the consensus estimate of $0.91 and improved from the $0.87 per share FFO in the first quarter of 2023. Revenue of $730.818 million beat the estimate of $726.227 million and exceeded Q1 2023 revenue of $705.088 million.
On June 28, Piper Sandler analyst Alexander Goldfarb upgraded Equity Residential from Neutral to Overweight and raised the price target to $80 from $70. That represents a potential upside of 17.1% from the recent closing price.
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Analyst Goldfarb isn’t the only analyst with a recent price target increase. On May 30, Mizuho analyst Vikram Malhotra maintained a neutral rating on Equity Residential and raised the price target from $61 to $64. However, analyst Goldfarb’s new price target is significantly higher.
One thing to note is that on June 26, Executive VP/CFO Robert Garechana reported an insider sale of 6,357 shares of Equity Residential stock for a total transaction value of $439,141. While insider sales are never as notable as insider buys, Equity Residential is up 32.7% since early November, so this could just be normal profit taking. Mr. Garechana still owns 14,576 shares, including more than 7,200 shares in 401(k) plans and a Supplemental Executive Retirement Plan (SERP) account.
Acadia Realty Trust
Acadia Realty Trust (NYSE:AKR) is a retail REIT based in Rye, NY with 190 properties located in centralized metropolitan areas in 22 states and Washington, D.C.
In recent news, Acadia Realty sold a 95% interest in Shops at Grand, a shopping center in Maspeth, NY, to JP Morgan Real Estate Income Trust, Inc. for $48 million, excluding closing costs. Acadia will use the net proceeds to reduce leverage and acquire high-growth retail properties on the street.
On June 26, JP Morgan analyst Alexander Goldfarb upgraded Acadia Realty Trust from Underweight to Neutral and set a price target of $18. However, Acadia is already quite close to that price target, having recently closed at $17.51.
Acadia Realty has been looking pretty solid lately, up 36.5% since late October.
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Americold Realty Trust
Americold Realty Trust Inc. Americold, Inc. (NYSE:COLD) is a specialty industrial REIT based in Atlanta, GA that owns and operates temperature-controlled warehouses, serving food manufacturers and retailers requiring cold storage. Americold has 241 locations in the U.S., Canada, Australia, New Zealand and Argentina and has been in business for 120 years.
On May 9, Americold reported its first-quarter 2024 operating results. FFO of $0.27 per share exceeded the consensus estimate of $0.25 and was 22.73% above FFO of $0.22 in Q1 2023. Revenue of $664.980 million missed the consensus estimate of $679.489 million and was down slightly from $676.489 million in Q1 2023.
The gains caught the attention of a few analysts. On May 24, Barclays analyst Anthony Powell kept Americold at equal weight and raised his price target to $26 from $25. A few days earlier, Scotiabank analyst Greg McGinniss upgraded Americold to Sector Outperform from Sector Perform and raised his price target to $30 from $27.
Investors focused on the FFO beat and ignored the weaker revenue, making Americold the second-best performing REIT in May with a total return of 21.39%. It was a nice recovery, as Americold still has a total return of -11.25% year to date.
On June 26, Piper Sandler analyst Anthony Paolone upgraded Americold Realty Trust to overweight from neutral and maintained a price target of $30, representing a potential upside of 20.72% from the recent closing price.
Despite beating FFO estimates and positive analyst ratings, Americold’s total return is -16.50% for the year.
Digital Real Estate Trust
Digital Real Estate Trust (NYSE:DLR) is a Data Center REIT based in Austin, TX with over 218,000 cross-connects in 300 facilities across 25 countries. It has over 5,000 customers, including stalwart technology companies such as Nvidia Corp. (NASDAQ: NVDA), Oracle Corp. (NASDAQ:ORCL), and IBM Common Stock (NYSE:IBM).
On May 2, Digital Realty Trust reported Q1 2024 operating results. FFO of $1.67 per share beat the consensus estimate of $1.63 per share and was above FFO of $1.66 in Q1 2023. Revenue of $1.33 billion missed the $1.36 billion estimate and was slightly below $1.34 billion in Q1 2023.
On June 26, analyst Ari Klein of BMO Capital raised Digital Realty Trust from Market Perform to Outperform and raised his price target to $170 per share from $144. This represents a potential gain of 14.2% from the recent closing price.
Analyst Klein wasn’t the only one to express positive sentiments about Digital Realty. On June 3, RBC Capital analyst Jonathan Atkin maintained an Outperform rating on Digital Realty and raised his price target to $160 from $144.
Digital Realty Trust has risen 33.9% since hitting a low of $111.05 in late October.
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This article Four REITs Get Analyst Upgrades This Week originally appeared on Benzinga.com
