Deutsche Bank Downgrades MGM Growth Properties (MGP) to Hold

Deutsche Bank downgraded MGM Growth Properties (NYSE: MGP) from Buy to Hold with a price target of $27.00 (from $28.00). Analyst Carlo Santarelli said he isn't inclined to recommend the stock in a rising rate environment.

"With rates likely to continue rising and meaningful valuation multiple expansion from here unlikely in our view, we are stepping aside from MGP and believe GLPI offers a better risk/reward. Our PT is down $1 to $27 as we roll our base year for valuation ahead to 2018. We note that our PT includes a value adjustment for National Harbor, which we believe equates to about $1 per share, should the transaction take place as expected. In short, we think the valuation discrepancy relative to GLPI is stretched here and we do not believe exposure to both REITs in a rising rate environment is prudent at this stage," said the analyst.

For an analyst ratings summary and ratings history on MGM Growth Properties click here. For more ratings news on MGM Growth Properties click here.

Shares of MGM Growth Properties closed at $24.60 yesterday.

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