JP Morgan Upgrades Six REITs To Start The Week

With real estate investment trusts (REITs) showing strength following the Federal Reserve's recent announcement of three possible rate cuts in 2024, analysts are scurrying to update their ratings on REITs. A positive start to the week was solidified by two analysts at JP Morgan upgrading six REITs from a cross-section of REIT subsectors. All six REITs were upgraded from Neutral to Overweight.

Take a look at the six REITs receiving upgrades this week. 

EPR Properties EPR is a Kansas City, Missouri-based diversified experiential REIT that owns and operates 288 movie theater chains, amusement parks, ski resorts, fitness centers and other recreational venues with 200 tenants in 44 states. It also owns 71 early childhood education centers and nine private schools for a portfolio of 359 properties.

On Dec. 14, EPR Properties announced its monthly dividend of $0.275 per share, payable Jan. 16 to shareholders of record on Dec. 29. The ex-dividend date is Dec. 28.

On Dec. 18, JP Morgan analyst Anthony Paolone upgraded EPR Properties from Neutral to Overweight and announced a price target of $51.

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Broadstone Net Lease Inc. BNL is a Rochester, New York-based internally managed, diversified REIT that was founded in 2007 and had its initial public offering (IPO) in 2020. John Moragne took over Broadstone's CEO position in January 2023.

Broadstone leases properties with a net-lease strategy and has a weighted average lease term (WALT) of 10.5 years with 19.3% of its top 10 tenants. Its leases carry a 2% annual rent escalation.

Broadstone's portfolio at the end of the third quarter included 800 properties, with most of them in 44 states and a handful across four Canadian provinces. Broadstone had 220 different tenants in 54 industries. It has 39 million rentable square feet.

On Dec. 18, JP Morgan analyst Paolone upgraded Broadstone Net Lease from Neutral to Overweight and announced a price target of $19.

Cousins Properties Inc. CUZ is an Atlanta-based office REIT, founded in 1958, that invests in Class A office towers located in high-growth markets of the Sun Belt.

Most of Cousins' portfolio consists of newer office buildings, with an average construction year of 2004. Many of its buildings include upscale amenities like exercise facilities, meeting rooms, wellness centers and cafes. Because of this, it's able to command rents that are 24% higher than the Class A average in its core markets of Atlanta; Austin, Texas; Charlotte, North Carolina;  Dallas; Phoenix; and Tampa, Florida. Its tenants are high grade and well diversified by industry.

On Dec. 18, Paolone upgraded EPR Properties from Neutral to Overweight and increased the price target from $26 to $27.

Tanger Inc. SKT, formerly Tanger Outlet Centers, is a Greensboro, North Carolina-based retail REIT that owns 39 indoor shopping centers and outdoor factory outlet malls with 15.7 million square feet across 20 states and in Canada. Tanger Factory Outlet Centers was founded in 1981 and had its IPO in May 1993. Its most recent occupancy rate was 98%.

On Nov. 30, Tanger acquired Bridge Street Town Centre in Huntsville, Alabama, for $193.5 million. Earlier in the month, it acquired the Asheville Outlets in Asheville, North Carolina, for $70 million.

On Dec. 18, JP Morgan analyst Michael Mueller upgraded Tanger Factory Outlet from Neutral to Overweight and increased the price target from $27 to $29.

Welltower Inc. WELL is a Toledo, Ohio-based healthcare REIT that owns interests in housing for seniors, post-acute communities and outpatient medical properties. It does this by providing capital to the operators who run these facilities. Welltower was founded in 1970 under the name of Health Care Fund and was incorporated as a REIT in 1985. Welltower is a member of the S&P 500.

Welltower has a portfolio of 2,017 properties, consisting of senior housing, outpatient medical and long-term/post-acute care across the U.S.

On Dec. 18, JP Morgan analyst Mueller upgraded Welltower from Neutral to Overweight and increased the price target from $92 to $99.

Prologis Inc. PLD is a San Francisco-based industrial REIT that owns and manages approximately 1.2 billion square feet in 5,500 industrial logistics properties throughout the U.S. and 19 other countries. Founded in 1983, the San Francisco-based company has long been a leader in appreciation among REIT stocks. Its most recent occupancy rate was 97.9%.

On Nov. 29, Director James B. Connor sold 68,100 shares of company common stock for a total of $7,527,093. While insider sales are not as noteworthy as buys, this was a large sale.

On Dec. 18, JP Morgan analyst Mueller upgraded Prologis from Neutral to Overweight and increased the price target from $123 to $148.

Investors should remember that analysts are only correct about 50% of the time and they should perform their own due diligence and not rely solely upon an analyst upgrade or downgrade as a reason to purchase or sell stock.

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