UBS on U.S. Retail REITs: Wrapping Up Strip Center Q2 Results (DDR, KIM, FRT, REG, WRI, EQY)
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Rating Summary:
7 Buy, 3 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 35 | New: 23
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UBS on U.S. Retail REITs: Wrapping Up Strip Center Q2 Results
Analyst, Christy McElroy, said, "Following a Q2 in which most of the strips beat or met expectations and many raised guidance, we remain positive on fundamentals near term. We see healthy leasing velocity driving occupancy upside amid little new supply, though pricing power is still tough so rent spreads will be slower to widen out. That said, given building headwinds in big box and grocery along with full valuations, we are more positive on the mall REITs vs. strips today. We favor DDR Corp (NYSE: DDR) and Kimco (NYSE: KIM) in the group."
McElroy did mention some concerns that headwinds may be picking up some steam and cites: 1) Big box demand is healthy, but a good amount of store closings are in the pipeline; 2) Issues around certain grocers like SUPERVALU (NYSE: SVU) may become more profound; 3) Strips are tapping unsecured debt and preferred markets.
UBS maintains a Neutral-rating on Federal Realty Investment Trust (NYSE: FRT), KIMCO (NYSE: KIM), Regency (NYSE: REG), Weingarten Realty (NYSE: WRI) and Equity One (NYSE: EQY).
FRT's price target was raised from $101 to $104, KIM's from $20.50 to $21, REG from $46 to $47, WRI from $26 to $27, and EQY from $21 to $22.
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Analyst, Christy McElroy, said, "Following a Q2 in which most of the strips beat or met expectations and many raised guidance, we remain positive on fundamentals near term. We see healthy leasing velocity driving occupancy upside amid little new supply, though pricing power is still tough so rent spreads will be slower to widen out. That said, given building headwinds in big box and grocery along with full valuations, we are more positive on the mall REITs vs. strips today. We favor DDR Corp (NYSE: DDR) and Kimco (NYSE: KIM) in the group."
McElroy did mention some concerns that headwinds may be picking up some steam and cites: 1) Big box demand is healthy, but a good amount of store closings are in the pipeline; 2) Issues around certain grocers like SUPERVALU (NYSE: SVU) may become more profound; 3) Strips are tapping unsecured debt and preferred markets.
UBS maintains a Neutral-rating on Federal Realty Investment Trust (NYSE: FRT), KIMCO (NYSE: KIM), Regency (NYSE: REG), Weingarten Realty (NYSE: WRI) and Equity One (NYSE: EQY).
FRT's price target was raised from $101 to $104, KIM's from $20.50 to $21, REG from $46 to $47, WRI from $26 to $27, and EQY from $21 to $22.
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