UPDATE: UBS Starts Kimco (KIM) at Buy

UBS analyst Michael Goldsmith initiates coverage on Kimco (NYSE: KIM) with a Buy rating and a price target of $25.00.

The analyst comments "Our favorable view on KIM's recovery reflects upside from improving occupancy, sustainable rent spread growth, stabilization of development & redevelopment projects, and accretion from the Weingarten acquisition. We believe recent leasing has been strong with 586k sq ft of new leases signed in 1Q'21 as its leased/economic occupancy gap widened by 40 bps sequentially. This momentum should continue. Further, we believe KIM is set up well for the long-run as it generates 54% of its ABR from anchor tenants (peer avg of 50%). We believe big box anchors will benefit from trip consolidation & omnichannel at the expense of small shops. As evidence, there were - 78,000 closures of retailers with less than 500 employees from 2007-2017. We model a 3-year FFO CAGR of 7.8% (cons. 7.1%) as it demonstrates incremental progress in its recovery. At 17x NTM FFO, KIM trades at a -1% discount to its peer group (vs. -9% avg discount last 3 years), which we see as an attractive valuation for its upside."

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

Shares of Kimco closed at $22.24 yesterday.

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