Capital One Securities Inc. analyst upgraded hisinvestment opinion of Kite RealtyGroup Trust to "overweight" from "equalweight," and decreased his price target to $20 from $22.
The analyst wrote in a research report: "Given thatshares trade at a significant discount to NAV, management was receptive to increasingdisposition activity without providing any guidance to preserve flexibility. Inaddition, management noted that a stock buy-back might make sense at these highlydiscounted levels. However, it appears to us that management is reacting toevents rather than anticipating the importance of having a flexible balancesheet. With increasingly expensive tenant improvements likely necessary tobackfill anchor boxes, we see balance sheet flexibility as increasinglyimportant. In our view, a significant (10% of EV) net disposition program in2018 would improve balance sheet flexibility meaningfully and push net debt toEBITDA toward the important 6.0x level."
