Boenning & Scattergood Downgrades DDR Corp. (DDR) to Underperform
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Boenning & Scattergood downgraded DDR Corp. (NYSE: DDR) from Neutral to Underperform with a price target of $15.50.
Analyst Floris van Dijkum said, "We are downgrading DDR to Underperform as further cleaning up of its portfolio could be dilutive to both FFO and NAV in the short to medium term. It appears that DDR could suffer higher than expected dilution due to asset sales like the recently closed upstate New York portfolio. Based on our strip database, DDR sold its upstate New York portfolio at an 8.9% cap rate, more than 150 bps wide of our carrying value, reducing our NAV estimate for DDR by $0.24. While there may have been some increased expected vacancy at the portfolio that could push the forward cap rate down, it appears that DDR was a price taker. We believe there could be more near-term downward pressure on NAV based on additional planned dispositions (up to 7% of current NAV) but are leaving estimates unchanged until third quarter results."
Shares of DDR Corp. closed at $16.36 yesterday.
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