Safehold (SAFE) Reiterated at Market Outperform by Citizens After 'Noisy' Q1 Results

Citizens analyst Mitch Germain reiterated a Market Outperform rating and $28.00 price target on Safehold (NYSE: SAFE).

The analyst commented, "Safehold's first-quarter earnings result was somewhat noisy, as an earnings miss appears to be associated with some seasonality related to operating hotels, while a situation is developing related to an office conversion in NYC, adding a level of uncertainty to the story; that said, we continue to view the company's mostly durable rents, relationships, and valuation as compelling and maintain our Market Outperform rating and $28 price target (NAV discount). This was the inaugural quarter in which SAFE operated two hotels, so we suspect it will take some time for the investment community to gain comfort around sector seasonality. The arising situation in NYC is complex, as the current owner acquired the property at an auction, so the relationship has evolved since the original ground lease was executed. On a positive note, the company's pipeline has expanded, with over $250M in the LOI phase, while the unrealized appreciation pool saw an upward revision. With one lawsuit pending, and another potentially emerging, we recognize some uncertainty has surfaced; that said, the shares trade at a meaningful discount relative to NAV, the leases are durable and offer compounding growth, while SAFE's affordable housing niche has support from the current administration."

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

Shares of Safehold closed at $14.49 yesterday.

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