Price Target Upgrades Bolster REITs, Is More Good News Ahead?

In the week from August 16 and August 22, Wall Street analysts bestowed 27 price target increases to REITs as interest rate cut fever hit Wall Street. By contrast, only four REITs received price cuts as of past Wednesday morning.

Kimco Realty Corp KIM received a price target hike from $20 to $23 from an analyst at Mizuho while downgrading the stock. Multiple analysts are looking for REITs to climb higher over the next 12 months.

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Several other REITs also received price target increases from more than one analyst. Regency Centers Corp REG had its price target hiked by Haendel St. Juste at Mizuho from $67 to $73, by Raymond James analyst RJ Milligan from $67 to $75, and by Truist Securities analyst Ki Bin Kim from $70 to $78.

Vornado Realty Trust VNO received two price target increases, one on Friday from analyst Steve Sakwa of Evercore ISI Group ($31 to $32) when he maintained Vornado at Underperform and another one on Tuesday from the same Steve Sakwa when he decided to upgrade Vornado to Outperform and hike the price target from $32 to $38.

Americold Realty Trust Inc COLD, a REIT that provides cold storage, received two warm price hikes this week On Friday, Truist Securities analyst Ki Bin Kim raised Americold's price target from $31 to $33 and on Monday, Scotiabank analyst Greg McGinniss raised his price target from $30 to $31.

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Federal Realty Investment Trust FRT On Friday, Raymond James analyst RJ Milligan generously hiked Federal Realty Investment Trust from $108 to $120, and on Monday, Mizuho analyst Haendel St. Juste raised the price target from $104 to $116.

It's not uncommon for Wall Street analysts to "pile on" after a stock has been upgraded or had its price target lifted by another analyst. Often, it seems as if the analysts try to one-up each other with price targets. But beyond that, Wall Street is eagerly anticipating the Fed will begin to cut rates in September. Analysts are sharpening their pencils to estimate how much of an effect rate cuts could have on REIT prices.

For REIT investors, the dark and gloomy clouds of 2022-2024 have given way to sunny skies over the end of 2024 and into 2025. Well, just one caveat- now the Fed must do its part.

Better Yields Than Some REITs?

The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through REITs.

Arrived Homes, the Jeff Bezos-backed investment platform has launched its Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a target 7% to 9% net annual yield paid to investors monthly. It paid 8.1% in July. The best part? Unlike other private credit funds, this one has a minimum investment of only $100. 

As long-term rates go down and short-term rates stay high, there’s a unique chance to invest in fix & flip loans before yields drop. Check out Benzinga's favorite high-yield offerings.