UPDATE: Jefferies Downgrades Acadia Realty Trust (AKR) to Hold

Jefferies analyst Linda Tsai downgraded Acadia Realty Trust (NYSE: AKR) from Buy to Hold with a price target of $15.00 (from $25.00).

The analyst comments "We are downgrading AKR from Buy to Hold. AKR has a unique portfolio and differentiated business model. This includes: i) redeveloping and densifying high-end, urban retail, ii) purchasing contiguous street retail assets to control the merchandising and the character of key retail corridors, iii) owning and operating traditional, grocery-anchored suburban retail, and iv) buying and selling higher yielding assets opportunistically in its fund business, which generates leveraged, mid-teen returns. In an inflationary environment, AKR's street retail offers some protection, with 3% embedded annual bumps, while its core shopping center portfolio's annual rent bumps are 1%. That said, retail is cyclical and the lack of retail store closures in recent years (record high in 2020) suggests store closures tick up if we enter a recession. Given AKR's smaller portfolio size, store closures have outsize impacts, resulting in greater volatility when the leasing environment slows. YTD, AKR is down -27.4%, underperforming the RMZ -20.4%. AKR trades at ~12.5x NTM AFFO, -27% lower vs its historical average (17x)."

For an analyst ratings summary and ratings history on Acadia Realty Trust click here. For more ratings news on Acadia Realty Trust click here.

Shares of Acadia Realty Trust closed at $15.86 yesterday.

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