BTIG analyst Thomas Catherwood reiterated a Buy rating and $218.00 price target on EastGroup Properties (NYSE: EGP)

The analyst comments "EastGroup reported 3Q24 FFO/sh of $2.13, $0.03 above our estimate and the Street. The company raised the midpoint of 2024 FFO/sh guidance by $0.02 to $8.35. We find it unpleasant to evaluate an otherwise robust earnings report - $0.03 beat, 5.5% GAAP SSNOI growth, 50.9% GAAP leasing spreads - and nitpick items that are seemingly “less good.” EGP’s full-year guidance of 97.0% average occupancy and 5.9% cash SSNOI growth would hardly qualify as “bad,” yet we fear the company’s multi-year run of outperformance created unachievable expectations given current market conditions. We have long argued that the focus on smaller, shallow-bay warehouses should insulate the company from the impact of oversupply, but are now concerned that weaker demand has begun to impact EGP's high-growth Sunbelt markets. Indeed, the company lowered 2024 occupancy and SSNOI guidance by (10) bps and (20) bps, respectively, and reduced developments starts by $30M to $230M (the lowest level since 2020). That said, EGP materially increased its acquisition guidance for the third straight quarter, and now expects to add $400M of operating properties this year (up 51% sequentially and 208% since initial guidance), which suggests that management remains confident in the outlook for its business over the medium-to-longer-term. During tomorrow's call, we look for additional insights into tenant demand in EGP's markets, the trajectory of occupancy as we head into 2025, and the general makeup and expected returns of acquisitions. Our estimates are under review. "

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Shares of EastGroup Properties closed at $181.21 yesterday.