Mizuho Securities Starts VEREIT (VER) at Neutral
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Mizuho Securities initiates coverage on VEREIT (NYSE: VER) with a Neutral rating and a price target of $9.50.
Analyst Haendel St. Juste commented, "We are initiating coverage of VEREIT, Inc. (VER) with a Neutral rating and a $9.5 price target as we believe the company’s valuation fairly reflects its risk-adjusted near-term prospects. VER’s new management team has undeniably improved the company (balance sheet, portfolio and investor confidence / perception) in just over one year of being in place and continues to effectively manage the company on its road to redemption. However, this improvement process (portfolio and balance sheet, in particular) has come at the cost of earnings growth. Given VER’s lower near-term earnings growth and higher risk profile (litigation risk, higher leverage), we believe the stock warrants a discounted valuation. We also see uncertainty over the future of VER’s Cole Capital unit, with implications to VER’s asset value and valuation. That said, we believe these issues should be resolved by YE2017, suggesting a potential re-rating may be in the not-too-distant horizon."
Shares of VEREIT closed at $9.61 yesterday.
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