In a climate of rising interest rates and record levels of inflation, investors are looking for safe havens to grow their money and survive these market headwinds. One asset class that tends to survive rate increases and inflationary times is real estate investment trusts (REITs). Considering this, one major brokerage firm is looking at a handful of REITs that could stand to benefit greatly in the coming months and years.
Deutsche Bank has issued a few calls with a focus on retail REITs. Each call is incredibly positive, forecasting sizable upside in both the near and long term.
Derek Johnston was the lead analyst on the calls, and he noted that retailer leasing demand and volumes likely remained “firm” in the second quarter, aiding occupancy growth for the retail strip REITs. However, he is more concerned looking through to the second half of 2022, saying a “looming recession and deteriorating retailer health may flip the positive Strip narrative,” forcing managements to temper expectations in Q3, while concurrently facing tougher compares.
It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Brixmor Property Group Inc. (NYSE: BRX): Deutsche Bank reiterated a Hold rating and lowered the $28 price target to $23, which implies upside of 13% from the most recent closing price of $20.31. The stock traded around $20 early Friday, in a 52-week range of $19.42 to $27.19. Shares are down over 22% year to date. It has a dividend yield of 4.8%.
Federal Realty Investment Trust (NYSE: FRT): Johnston reiterated a Buy rating. It also cut the $143 price target to $121, implying upside of 25% from the most recent close at $96.92. The 52-week trading range is $92.02 to $140.51, and shares traded near $96 on Friday. The stock is down 30% year to date. The dividend yield is 4.5%.
Kimco Realty Corp. (NYSE: KIM): Deutsche Bank reiterated a Hold rating and lowered the $26 price target to $23. The implied upside from the most recent closing price of $19.82 is 16%. The stock traded at around $20 on Friday, in a 52-week range of $18.52 to $26.57. Shares are down over 21% year to date. The dividend yield is 4.1%.
Regency Centers Corp. (NASDAQ: REG): Though the Buy was reiterated, the firm cut the $83 price target to $72, implying upside of 21% from the most recent close at $59.63. The stock traded around $59 early Friday, in a 52-week range of $55.78 to $78.78. Shares are down over 22% year to date, and the dividend yield is 4.3%.
RPT Realty (NYSE: RPT): Deutsche Bank reiterated a Buy rating and reduced the price target to $14 from $17. The implied upside from the most recent closing price of $9.82 is 42%. The stock has a 52-week trading range of $9.25 to $14.99, and it traded near $9 a share on Friday. Shares are down 28% year to date. The dividend yield is 5.4%.
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