UPDATE: UBS Downgrades Tanger Factory Outlet Centers (SKT) to Neutral
UBS downgraded Tanger Factory Outlet Centers (NYSE: SKT) from Buy to Neutral with a price target of $34 (from $38).
Analyst Ross T. Nussbaum said, "While SKT's 2Q earnings report was fine, the development pipeline is experiencing some downward revision. SKT cut expected returns on a number of assets, while pushing out the delivery dates on 2 projects and raising cost ests on others. Most notable are SKT's Ottawa and Westgate projects, where yields were cut 150bps and 300bps respectively."
"With yields on another $400m of 2015 deliveries not provided yet, our conviction level on SKT's "9-11%" range is dampened in light of recent developments. Though SKT did raise its yield forecast on its recently open Charlotte project, this is likely to be overshadowed by cuts at several others. Combined with Atlantic City (~5% of NOI) coming under increasing pressure, in our view, we think shares of SKT will be stuck in the mid-$30 range until it can demonstrate enhanced execution on development front," he added.
For an analyst ratings summary and ratings history on Tanger Factory Outlet Centers click here. For more ratings news on Tanger Factory Outlet Centers click here.
Shares of Tanger Factory Outlet Centers closed at $34.40 yesterday.