Four REITs Get Analyst Upgrades This Week

As an investor, it's always exciting to see positive news on one of your stocks that could potentially increase the share price. The news might be a dividend raise, 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 projected to have substantial upside from present share price levels to meet the new price targets. Take a look:

Equity Residential

Equity Residential EQR is a Chicago-based REIT that owns or invests in 299 apartment communities with 79,688 units located in 12 larger and more affluent cities, such as Boston, New York, Washington, D.C., Seattle, San Francisco and Denver. Its May 2024 occupancy rate 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 topped the 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 from $70 to $80. That represents a potential gain of 17.1% from its recent closing price.

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Analyst Goldfarb is not the only analyst with a recent price target hike. On May 30, Mizuho analyst Vikram Malhotra maintained a Neutral rating on Equity Residential and raised the target from $61 to $64. However, Analyst Goldfarb’s new target price 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 noteworthy as insider buys, Equity Residential has gained 32.7% since early November, so this could be just some normal profit-taking. Mr. Garechana still owns 14,576 shares, including over 7,200 shares in 401(k) plans and a Supplemental Executive Retirement Plan (SERP) account.

Acadia Realty Trust

Acadia Realty Trust AKR is a Rye, NY-based retail REIT with 190 properties across centralized urban 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 J.P. Morgan Real Estate Income Trust, Inc. for $48 million, excluding closing costs. Acadia will use the net proceeds to reduce leverage and purchase high-growth street retail properties. 

On June 26, JP Morgan analyst Alexander Goldfarb upgraded Acadia Realty Trust from Underweight to Neutral and announced an $18 price target. However, Acadia is already reasonably close to this price target, with a recent close of $17.51.

Acadia Realty has recently looked quite substantial and has gained 36.5% since late October. 

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Americold Realty Trust

Americold Realty Trust Inc. COLD is a specialized Atlanta, GA-based industrial REIT that owns and operates temperature-controlled storage warehouses and services food producers and retailers who need cold storage. Americold has 241 locations across 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 beat 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 declined slightly from $676.489 million in Q1 2023.

The earnings caught the eye of a few analysts. On May 24, Barclays analyst Anthony Powell maintained Americold at equal weight and raised the price target from $25 to $26. A few days earlier, Scotiabank analyst Greg McGinniss upgraded Americold from Sector Perform to Sector Outperform and raised the price target from $27 to $30.

Investors keyed in on the FFO beat and ignored the weaker revenue, making Americold the second-best-performing REIT in May with a 21.39% total return. This was a nice rebound because, year-to-date, Americold still has a total return of -11.25%. 

On June 26, Piper Sandler analyst Anthony Paolone upgraded Americold Realty Trust from Neutral to Overweight and maintained the price target at $30, which represents a potential gain of 20.72% from its recent closing price.

However, despite beating the estimates on FFO and favorable analyst reviews, Americold’s total return is -16.50% year-to-date.

Digital Realty Trust

Digital Realty Trust DLR is an Austin, TX-based Data Center REIT with over 218,000 cross-connects in 300 facilities across 25 countries. It has over 5000 customers, including stalwart tech companies such as Nvidia Corp. NVDA, Oracle Corp. ORCL, and IBM Common Stock 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 estimated $1.36 billion and was slightly below $1.34 billion in Q1 2023. 

On June 26, BMO Capital analyst Ari Klein upgraded Digital Realty Trust from Market Perform to Outperform and raised the price target from $144 to $170 per share, representing a potential gain of 14.2% from its recent closing price.

Analyst Klein was not the only one expressing positive sentiments about Digital Realty. On June 3, RBC Capital analyst Jonathan Atkin maintained an Outperform rating on Digital Realty and raised the price target from $144 to $160.

Digital Realty Trust is up 33.9% since touching a low of $111.05 in late October. 

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