FBR Capital Starts National Retail Properties (NNN) at Market Perform; Consistent Yield with Portfolio Growth on the Horizon

FBR Capital initiates coverage on National Retail Properties (NYSE: NNN) with a Market Perform. PT $25.

FBR analyst says, "National Retail Properties’ portfolio is composed of well-located properties net leased to retail tenants on a long-term (10–15 years) basis. While we remain cautious as to the consistency of an economic recovery, we believe that NNN has created a portfolio with significant diversification, enabling the REIT to continue to generate stable cash flows and dividends. That being said, we believe that the risk/reward between the company’s credit tenant exposure and current dividend payout is a notion that the market wrestles with consistently. We believe that, at current levels, shares are appropriately valued, even considering NNN’s steep price to NAV multiple. We base our $25.00 target on a 16.5x 2011 FFO multiple and 20% premium to our NAV estimate. We would become more constructive on NNN in either of two cases: (1) valuation became more attractive, or (2) a stronger-than-expected strengthening in the economy led to more earnings growth potential."

For more ratings news on National Retail Properties click here and for the rating history of National Retail Properties click here.

Shares of National Retail Properties closed at $25.40 yesterday.

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