BofA Securities Downgrades W. P. Carey & Co. (WPC) to Underperform, 'we turn more bearish on the net lease sector'

BofA Securities analyst Joshua Dennerlein downgraded W. P. Carey & Co. (NYSE: WPC) from Neutral to Underperform with a price target of $67.00 (from $78.00).

The analyst comments "We are moving to Underperform from Neutral given: (1) WPC benefited from rising inflation given that 53.5% of rent bumps are tied to inflation. Inflation has cooled and forecasts point to further cooling. As a result, we believe SS growth has peaked. Management even noted that SS growth will slow to 3% in 2024. (2) WPC has the second highest office exposure within our net lease coverage (16.1% of ABR). In 2Q, WPC sold 3 vacant office assets. We expect this trend to grow in the years ahead. (3) As a percent of overall debt maturities, WPC has roughly 15% of debt rolling in 2024. That compares to the peer average of 5.4%. (4) Leverage at 5.7x is above peers at 5.2x. We are lowering our applied AFFO multiple to 12x from 14. Our PO falls to $67 from $78."

For an analyst ratings summary and ratings history on W. P. Carey & Co. click here. For more ratings news on W. P. Carey & Co. click here.

Shares of W. P. Carey & Co. closed at $66.86 yesterday.

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