Wells Fargo Starts STAG Industrial (STAG) at Market Perform

January 3, 2013 7:23 AM EST Send to a Friend
Get Alerts STAG Hot Sheet
Price: $24.40 +0.83%

Rating Summary:
    10 Buy, 2 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 29 | Down: 45 | New: 4
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Wells Fargo initiates coverage on STAG Industrial (NYSE: STAG) with a Market Perform rating and $17-$18 valuation range.

The firm comments, "STAG has an attractive return potential from its strategy of investing in class B industrial assets where NOI yields are elevated owing to limited institutional investor competition. High cap rates, combined with attractive financing options--debt and equity--should allow for continued earnings and dividend growth. The risk is that STAG trades at a premium to NAV/sh, and if fundamentals become challenged, or earnings/dividend growth begins to slow, the current P/NAV premium could evaporate. For now, we think the outlook for earnings and dividend growth remains upbeat, which should enable the current valuation premium to be maintained. We expect modest capital appreciation and the current dividend yield (6%) to drive solid total returns in 2013. Our 2012E FFO is $0.90/sh and our 2013E FFO is $1.22/sh. Our 'core' 2012 and 2013 FFO estimates are $1.21/sh and $1.37/sh, respectively. Our valuation range is $17-18."

For an analyst ratings summary and ratings history on STAG Industrial click here. For more ratings news on STAG Industrial click here.

Shares of STAG Industrial closed at $18.26 yesterday.


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