UBS Upgrades Spirit Realty Capital (SRC) to Neutral
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UBS analyst Brent Dilts upgraded Spirit Realty Capital (NYSE: SRC) from Sell to Neutral with a price target of $41.00 (from $27.00).
The analyst comments "With COVID infection/death rates falling on the back of a positive vaccine distribution trajectory, coupled with momentum in the transaction market (SRC guiding to $800mn of acquisitions in 2021), we believe this should lead to AFFO/sh earnings growth of 3.8% in FY21 (vs -15% previously). Our prior bearish thesis on the stock was based on the expectation of rising Covid-19 infection rates forcing cities to implement further restrictions on businesses leading to the potential of rent collections falling back to 1H20 lows in the mid 70% range. In addition, the vaccine roll-out was in its early stages and remained uncertain on effectively distributing the vaccine. Although our expectations for rising infection rates and further restrictions increasing played out, consumer demand remained strong as tenants adapted to the changing environment which led to rent collections increasing and stabilizing in the low to mid 90% range."
Shares of Spirit Realty Capital closed at $43.28 yesterday.
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