5 REITs That Just Received Price Target Increases

Analysts carry a great deal of weight on Wall Street and help to shape investor sentiment. Analyst upgrades & price target increases are great motivations for investors to buy a stock. Consequently, when an analyst upgrades or maintains a previous rating while increasing the price target, investors may anticipate a boost to the share price.

Analysts will often review a particular subsector and then increase price targets on more than one stock within a certain sector. Other times when one analyst boosts a rating on a stock, another analyst will soon follow suit.

Three analysts at Mizuho have been busy in the last few days, assessing numerous real estate investment trusts (REITs). Here are five REITs that just received Mizuho price target hikes:

VICI Properties Inc VICI is a New York based diversified experiential REIT. It specializes in owning and operating gaming, hospitality, and entertainment properties. Its triple-net portfolio includes hotels in Las Vegas, such as Caesars Palace, MGM Grand and the Venetian Resort.

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VICI Properties was formed as a REIT in 2017 and was a spinoff from Caesars Entertainment Operating Company as part of a Chapter 11 reorganization. The IPO was held on Feb. 1, 2018. Vici Properties' portfolio presently includes 54 gaming and 38 nongaming facilities, with 60,300 hotel rooms and over 500 restaurants, bars, nightclubs and sportsbooks.

On May 1, VICI Properties reported first quarter earnings that met consensus estimates and beat the consensus estimate on revenue.

On May 10, Mizuho analyst Haendel St. Juste maintained VICI Properties with a Buy and raised the price target from $31 to $32. 

Realty Income Corp O is a San Diego-based, triple-net lease REIT. It has over 15,450 properties worldwide. The "Monthly Dividend Company," as it's widely known, is a member of the S&P 500 and an S&P 500 Dividend Aristocrat. Realty Income has increased its dividend 124 times since its IPO in 1994. 

On May 6, Realty Income released its first quarter operating results. Funds From Operations (FFO) of $1.05 per share beat the estimate of $1.04 per share and revenue of $1.26 billion beat the consensus estimate of $1.10 billion.

On May 10, Mizuho analyst Vikram Malhorta maintained Realty Income with a Buy and raised the price target from $56 to $59. Realty Income recently closed at $54.63.

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Essential Properties Realty Trust Inc EPRT is a Princeton, NJ based diversified REIT that owns and manages single-tenant properties with net leases for service-oriented and experience-based businesses. Essential Properties was founded in 2016. It has a portfolio of 1873 properties across 48 states. 99.8% of its properties are presently leased, with a weighted average lease term (WALT) of 14.0 years. 

First quarter earnings were mixed. On April 24, Essential Properties reported an FFO of $0.42 per share, missing the estimate of $0.46 per share but revenue of $103.50 million topped the consensus estimate of $10.06 million.

On May 10, Mizuho analyst Vikram Malhorta maintained Essential Properties Realty Trust with a Buy and raised the price target from $26 to $29.

Agree Realty Corporation ADC is a Bloomfield Hills, MI based triple-net-lease REIT focused on retail properties. Its portfolio includes 2161 owned and operated properties totaling 45 million square feet across 49 states. 69% of its tenants are investment grade, including well-known names like Walmart Inc WMT, Best Buy Co Inc BBY Dollar General Corp DG and Kroger Co KR.

Agree Realty had a terrific first quarter. On April 23 Agree reported FFO of $1.03 per share, beating the estimate of $1.01 per share. Revenue of $149.453 million was ahead of the estimate of $146.462 million and topped its Q1 2023 revenue of $126.618 million by 18.03%.

On May 10, Mizuho analyst Haendel St. Juste maintained Agree Realty at Neutral and raised the price target from $60 to $62.

Welltower Inc WELL is a Toledo, Ohio based health care 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 original 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 total portfolio of 2096 properties, comprised of Senior Housing, Outpatient Medical and Long-term/Post-Acute care across the U.S. 

On April 29, Welltower reported its Q1 earnings. FFO of $1.01 per share beat the consensus estimate of $0.95. Revenue of $1.859 billion beat the consensus estimate of $1.806 billion and topped Q1 2023 revenue of $1.561 billion.

Welltower also increased its FY24 FFO from $3.95-$4.10 per share to $4.02-$4.15 per share.

On May 8, Mizuho analyst Omotayo Okusanya maintained Welltower with a Buy and raised the price target from $98 to $105.

With the strong earnings reports, it's easy to see why these five REITs received price target increases. However, investors should remember that analysts’ price targets are the highest price expected within the next year and analysts are only correct about 50% of the time.

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