On Friday, Jones Trading adjusted its outlook on Alpine Income Property Trust (NYSE:PINE), reducing the stock price target to $18 from $19, while still recommending the shares as a Buy.
The company outperformed expectations with its first-quarter financials, delivering Funds From Operations (FFO) of $0.41 per share, surpassing both the analyst's and consensus estimates of $0.38. Adjusted Funds From Operations (AFFO) were reported at $0.42 per share, also exceeding estimates.
Alpine Income Property Trust reported strategic property and investment moves in the first quarter of 2024. The trust acquired a land parcel for $1 million, which is already leased to CVS in Baton Rouge, and initiated a first mortgage investment with a commitment of $7.2 million, with half funded in the quarter at a yield of 11.3%.
The company also confirmed its full-year guidance for FFO and AFFO, projecting a range of $1.51 to $1.56 and $1.53 to $1.58, respectively.
During the same period, Alpine Income Property Trust actively engaged in share repurchases. Approximately 46,000 shares were bought back at an average price of $16.90, totaling $0.8 million. This action utilized the remaining capacity under the current repurchase program.
Jones Trading's revised $18 price target is based on an 11.6 times multiple of its 2024 FFO per share estimate of $1.55 and approximately 91% of the current Net Asset Value (NAV) estimate of $19.82.
The firm justifies this target by pointing to the sluggish transaction market and the anticipated timing of property dispositions and acquisitions, which could see improvement with more clarity in monetary policy. The target implies a potential total return of 31%.
InvestingPro Insights
Alpine Income Property Trust (NYSE:PINE) has demonstrated a blend of strategic property investments and shareholder-friendly actions, as highlighted by the recent moves in share repurchases and consistent dividend increases.
According to InvestingPro Tips, management's aggressive share buyback strategy and the fact that the company has raised its dividend for 5 consecutive years signal a commitment to returning value to shareholders. Despite analysts' concerns about profitability in the current year, the company's ability to maintain a significant dividend yield, currently at 7.56%, remains a key attraction for income-focused investors.
Delving into the financial health of the company through InvestingPro Data, Alpine Income Property Trust's market capitalization stands at $229.1 million, with a high gross profit margin over the last twelve months at 84.93%.
These robust margins, alongside the company's liquid assets exceeding short-term obligations, suggest a solid financial footing. The company's price to book ratio as of the last twelve months is 0.91, indicating that the stock may be undervalued relative to its assets.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available that can provide further guidance on the company's valuation and future prospects. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking valuable insights to inform their investment decisions. There are 8 more tips available on InvestingPro that could help investors gain a more comprehensive understanding of Alpine Income Property Trust's potential.
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