UBS on Real Estate: Resilient Retail Sales Aiding Landlords
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Price: $38.22 -0.03%
Rating Summary:
4 Buy, 12 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
4 Buy, 12 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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UBS on Real Estate: Resilient Retail Sales Aiding Landlords
UBS analyst said, "We Expect Modest Fundamental Improvement in 2H11 and into 2012 - Retailers are feeling better in the midst of resilient consumer spending. As such, we see modestly positive trends in demand for space which, combined with little new supply growth, should result in continued firming of leasing fundamentals at least through the remainder of 2011 as landlords gain incrementally more leverage."
"But the Underpinnings of Recent Trends Are Shaky at Best - We see numerous headwinds that could potentially put a dent in consumer spending, reflected in the vulnerability of consumer sentiment/confidence data, including: 1) a weaker-than-expected jobs market; 2) higher food and energy costs (despite a recent pullback in oil prices); 3) a still-weak housing market; 4) mounting concerns about the European debt crisis (with Italy now at the forefront); and 5) political turmoil in the U.S. that threatens to harm the economic recovery."
'Overweight Class A Malls, Marketweight Strips; Buy Tanger Factory Outlet (NYSE: SKT) & Developers Diversified (NYSE: DDR) - Given discretionary spending headwinds, we take a defensive approach in Malls and recommend growthy, solid balance sheet stories (SKT, SPG). We’re more selective in Strips, where we see several crosscurrents playing out, and favor DDR given valuation, above-average internal growth, and an improving balance sheet."
UBS analyst said, "We Expect Modest Fundamental Improvement in 2H11 and into 2012 - Retailers are feeling better in the midst of resilient consumer spending. As such, we see modestly positive trends in demand for space which, combined with little new supply growth, should result in continued firming of leasing fundamentals at least through the remainder of 2011 as landlords gain incrementally more leverage."
"But the Underpinnings of Recent Trends Are Shaky at Best - We see numerous headwinds that could potentially put a dent in consumer spending, reflected in the vulnerability of consumer sentiment/confidence data, including: 1) a weaker-than-expected jobs market; 2) higher food and energy costs (despite a recent pullback in oil prices); 3) a still-weak housing market; 4) mounting concerns about the European debt crisis (with Italy now at the forefront); and 5) political turmoil in the U.S. that threatens to harm the economic recovery."
'Overweight Class A Malls, Marketweight Strips; Buy Tanger Factory Outlet (NYSE: SKT) & Developers Diversified (NYSE: DDR) - Given discretionary spending headwinds, we take a defensive approach in Malls and recommend growthy, solid balance sheet stories (SKT, SPG). We’re more selective in Strips, where we see several crosscurrents playing out, and favor DDR given valuation, above-average internal growth, and an improving balance sheet."
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