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As an investor, it is always interesting to see positive news about one of your stocks that could potentially increase the stock price. This could be a dividend increase, a good earnings report, a new product, service or alliance, or an upgrade from a prestigious analyst at a brokerage firm or bank.
Four real estate investment trusts (REITs) have had their ratings upgraded by analysts this week. Three of them would need to see substantial upside from current share price levels to hit the new price targets. Take a look:
Residential Equity
Residential Equity (NYSE:EQR) is a Chicago-based real estate investment trust that owns or invests in 299 apartment communities with 79,688 units located in 12 larger, more affluent cities, including Boston, New York, Washington, D.C., Seattle, San Francisco, and Denver. Its occupancy rate as of May 2024 was 96.5%. Equity Residential has been a member of the S&P 500 since 2001.
On April 23, Equity Residential reported its first quarter 2024 operating results. Funds from operations (FFO) of $0.93 per share beat the consensus estimate of $0.91 and improved from FFO of $0.87 per share in the first quarter of 2023. Revenue of $730.818 million beat the estimate of $726.227 million and exceeded first quarter 2023 revenue of $705.088 million.
On June 28, Piper Sandler analyst Alexander Goldfarb upgraded Equity Residential’s rating from Neutral to Overweight and raised its price target from $70 to $80. That represents a potential gain of 17.1% from its recent closing price.
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Goldfarb isn’t the only one who recently raised his price target. On May 30, Mizuho analyst Vikram Malhotra maintained a neutral rating on Equity Residential and raised the price target from $61 to $64. However, Goldfarb’s new price target is significantly higher.
It’s worth noting that on June 26, Executive Vice President and CFO Robert Garechana announced an insider sale of 6,357 shares of Equity Residential, for a total value of $439,141. While insider sales are never as large as insider purchases, Equity Residential is up 32.7% since early November, so this could just be a case of normal profit-taking. Garechana still owns 14,576 shares, including over 7,200 shares in 401(k) plans and a Supplemental Executive Retirement Plan (SERP) account.
Acadia Real Estate Trust
Acadia Real Estate Trust (NYSE:AKR) is a retail real estate investment firm based in Rye, New York, with 190 properties in centralized urban areas in 22 states and Washington, D.C.
Recently, Acadia Realty sold a 95% interest in Shops at Grand, a shopping center in Maspeth, New York, to JP Morgan Real Estate Income Trust, Inc. for $48 million, excluding closing costs. Acadia will use the net proceeds from the sale to reduce debt and purchase high-growth retail properties on the streets.
On June 26, JP Morgan analyst Alexander Goldfarb upgraded Acadia Realty Trust from Underweight to Neutral and announced a price target of $18. However, Acadia is already quite close to that price target, with a recent close of $17.51.
Acadia Realty has looked quite strong recently, gaining 36.5% since the end of October.
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Americold Real Estate Trust
Americold Real Estate Trust Inc. (NYSE:COLD) is a specialty real estate investment trust based in Atlanta, Georgia that owns and operates temperature-controlled storage facilities and provides services to food producers and retailers requiring cold storage. Americold has 241 locations in the United States, Canada, Australia, New Zealand and Argentina and has been in business for 120 years.
On May 9, Americold reported its first quarter 2024 operating results. FFO of $0.27 per share beat the consensus estimate of $0.25 and was 22.73% higher than the FFO of $0.22 in the first quarter of 2023. Revenue of $664.980 million missed the consensus estimate of $679.489 million and was slightly lower than $676.489 million in the first quarter of 2023.
The results caught the attention of a few analysts. On May 24, Barclays analyst Anthony Powell kept Americold at equal weight and raised the price target from $25 to $26. A few days earlier, Scotiabank analyst Greg McGinniss upgraded Americold from Sector Perform to Sector Outperform and raised the price target from $27 to $30.
Investors focused on the higher FFO yield and ignored the revenue decline, making Americold the second best-performing REIT in May with a total return of 21.39%. This is a nice rebound as Americold still has a year-to-date total return of -11.25%.
On June 26, Piper Sandler analyst Anthony Paolone upgraded Americold Realty Trust from Neutral to Overweight and maintained the price target at $30, representing a potential gain of 20.72% from its recent closing price.
However, despite higher FFO estimates and favorable analyst reviews, Americold’s total return is -16.50% year-to-date.
Digital Real Estate Trust
Digital Real Estate Trust (NYSE:DLR) is a data center real estate investment trust based in Austin, Texas, with over 218,000 cross-connections in 300 facilities across 25 countries. It has over 5,000 clients, including leading technology companies such as Nvidia Corp. (NASDAQ:NVDA), Oracle Corp. (NASDAQ:ORCL), And IBM Common Stock (NYSE:IBM).
On May 2, Digital Realty Trust reported its first quarter 2024 operating results. FFO of $1.67 per share beat the consensus estimate of $1.63 per share and was higher than the FFO of $1.66 in the first quarter of 2023. Revenue of $1.33 billion missed the estimate of $1.36 billion and was slightly lower than the $1.34 billion in the first quarter of 2023.
On June 26, BMO Capital analyst Ari Klein upgraded Digital Realty Trust from Market Perform to Outperform and raised the price target from $144 to $170 per share, representing a potential gain of 14.2% from its recent closing price.
Analyst Klein wasn’t the only one expressing positive sentiments toward Digital Realty. On June 3, RBC Capital analyst Jonathan Atkin maintained an Outperform rating on Digital Realty and raised the price target to $160 from $144.
Digital Realty Trust is up 33.9% since hitting a low of $111.05 in late October.
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