It’s not all bad – analysts have upgraded these 3 REITs


After several months of deep price falls and an avalanche of downgrades from analysts, shares of real estate investment trusts (REITs) bottomed out in mid-October and have been on the upswing ever since.

Even as REITs bounced back over the past month, many analysts have been reluctant to upgrade them until recently. But with the consumer price index (CPI) and producer price index (PPI) slightly improving over the past two weeks, analysts are starting to warm to the REIT sector.

Here are three REITs that have undergone analyst upgrades in recent weeks:

Prologis Inc. (NYSE: PLD) is a San Francisco-based industrial REIT that owns and manages industrial logistics properties in the US and 18 other countries. Founded in 1983, Prologis is a leader in valuation among REIT stocks. While Prologis has an annual dividend of $3.16, it focuses more on growth than income, and its annual dividend yield of 2.8% tends to be well below that of other REITs in its peer group.

From October 2017 to April 2022, Prologis gained about 210%. Very few REITs could match that feat. But interest rate hikes pushed Prologis’ share price from $174 to a low of $98 in mid-October. It recently closed at $113.65.

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On Oct. 17, Scotiabank analyst Nicholas Yulico upgraded Prologis from Sector Perform to Sector Outperform, but still lowered his price target from $137 to $116. At the time, Prologis was trading around $105. Other analysts recently restored Buy and Overweight ratings on Prologis, while projecting target prices as high as $140.

Kite Real Estate Group Trust (NYSE: KRG) is an Indianapolis retail REIT with open-air and mixed-use real estate from Vermont to California. The malls are mostly anchored in supermarkets. Other tenants include CVS Pharmacy Inc., The Fresh Market, Best Buy Co. Inc., Burlington, Ross Stores Inc. and Costco Wholesale.

Kite Realty recently announced a dividend of $0.24 per share, up 9% from the previous quarter. Forward Funds from Operation (FFO) of $1.89 easily covers the $0.96 annual dividend and is currently yielding 4.4%.

On November 9, Bank of America Securities analyst Craig Schmidt raised Kite Realty Group Trust from Neutral to Buy, while simultaneously raising his price target from $22 to $25. The 52-week range is $16.42 to $23.35, and the most recent closing price was $21.62.

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American Realty Trust Inc. (NYSE: COLD) is a storage REIT that uses advanced technology to refrigerate food for supermarkets, food manufacturers and international food and beverage organizations. It has 249 locations with different temperature zones. The motto is: “From farm to fork and every step in between.” The versatile network looks like this:

American Realty Trust

American Realty Trust

On November 3, Americold Realty Trust presented its third quarter operating results. FFO of $0.29 per share was higher year-over-year, beating analysts’ estimates by $0.04, but the company missed analyst expectations on revenue by 1.3%.

Nevertheless, on November 14, Bank of America Securities analyst Joshua Dennerlein upgraded Americold Realty Trust from Neutral to Buy and raised his price target from $27.50 to $33.50. In June, Dennerlein also upgraded Americold Realty Trust from Underperform to Neutral. No other analyst has upgraded it in 2022.

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Americold Realty Trust has a 52 week range of $21.49 to $33.50. The recent closing price was $28.95. The annual dividend is $0.88 and the current yield is 3.03%. Another positive is dividend growth, as Americold Realty Trust has increased its dividend by 57% over the past five years.

REIT investors hope to see more analyst upgrades in the coming months, especially for companies that can continue to improve their FFO numbers.

REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it’s too late. Benzinga’s in-house real estate research team has worked hard to identify the biggest opportunities in the current market, which you can access for free by signing up for Benzinga’s weekly REIT report.

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