Upgrade
Mizuho Securities USA LLC analyst Haendel St. Juste upgraded single-tenant retail real estate investment trust Agree Realty Corp. to "buy" from "neutral" and retained a price target on the stock of $70.
Given its ability to play "both sides of the ball," Agree Realty can be "a net winner in a weaker macro/higher capital-cost environment," the analyst wrote. The analyst believes that the company's recent underperformance compared to peers provides investors with an attractive entry point for a REIT with "high investment-grade tenancy, formidable liquidity, and above-average growth potential," according to a June 22 research note.
__________________
Downgrade
In a June 25 research note, BMO Capital Markets analyst Michael Markidis downgraded NorthWest Healthcare Properties REIT to "market perform" from "outperform," with a decreased price target of C$7 from C$10.
The downgrade reflects the June 21 announcement that NorthWest Healthcare and a UK investor were scrapping their planned joint venture, which included the proposed sale of a 70% stake in 14 hospitals that are 100%-owned by the REIT.
"We believe the heightened uncertainty surrounding the REIT's capital structure, liquidity, and distribution will likely be an overhang for the foreseeable future," the analyst said.
__________________
Reiterations
B. Riley Securities analyst Bryan Maher reiterated "buy" ratings for each of Office Properties Income Trust and Diversified Healthcare Trust. In a June 26 research note, the analyst gave a price target of $19 for Office Properties and $3 for Diversified Healthcare.
Office Properties' proposed merger with Diversified Healthcare has been upside down for several weeks, given "a concerted effort by some shareholders to derail the transaction," Maher said.
The shareholders contended that Diversified Healthcare has more value as a stand-alone company than under Office Properties' control. "While we agree with this view, [Diversified Healthcare], on a stand-alone basis, comes with the increased risk of being unable to refinance $700M in debt maturities in [the first half of 2024]," the analyst said.
If the deal does not materialize, the analyst could revert to his previous price target of $5 for Diversified Healthcare, according to the note.
The analyst also reiterated The RMR Group Inc. at "buy" with a price target of $37. RMR manages both Office Properties and Diversified Healthcare.
__________________
BMO Capital Markets analysts Ari Klein and John Kim reiterated their "outperform" rating on datacenter REIT Equinix Inc., with a target price of $870.
Equinix "has formulated a comprehensive [environmental, social and governance] strategy and is a leading innovator in building sustainable data centers," the analysts said in a June 21 note.
The analysts expect the REIT to continue to benefit from secular tailwinds, consistent execution and a strong balance sheet that warrants a premium multiple.
