On Tuesday, JPMorgan (NYSE:JPM) reiterated its Overweight rating on VICI Properties Inc. (NYSE: NYSE:VICI) with a steady price target of $36.00. The firm's analysis indicates that VICI's adjusted funds from operations (AFFO) per share for 2024 is projected to remain at $2.26, reflecting a year-over-year increase of 4.8%. This forecast aligns with Bloomberg's consensus of $2.25 and is slightly above the company's own guidance range of $2.22 to $2.25.
VICI's 2025 AFFO per share estimate is also unchanged at $2.33, showing a 3.2% increase from the previous year, which is marginally below Bloomberg's consensus of $2.34. The upcoming Caesars (NASDAQ:CZR) variable rent reset, scheduled for November 1, 2024, is expected to result in a blended increase of 1.5% for the approximately $1.2 billion annual rent, with the Las Vegas properties contributing a 3.3% rise and regional properties a 0.3% uptick.
JPMorgan's assessment suggests that while regional assets are still performing below pre-COVID levels, Las Vegas properties are likely to compensate for any potential shortfall in regional rent due to their stronger performance. Despite this, the firm anticipates a deceleration in VICI's internal growth over the next one to two years owing to the lease reset and a potential decrease in inflation.
The projected cash net operating income (NOI) growth for VICI is estimated at 2.7% for 2024 and 1.7% for 2025, which, although lower, positions the company favorably within the net lease real estate investment trust (REIT) sector.
JPMorgan's net asset value (NAV) per share estimate for VICI stands at $28, based on a 7.0% blended assumed capitalization rate. With the current stock price, this implies a capitalization rate of 6.9%. The firm's price target of $36 per share is maintained, reflecting confidence in the stock's potential.
InvestingPro Insights
According to InvestingPro data, VICI Properties Inc. (NYSE: VICI) boasts a solid market capitalization of $29.48 billion and is trading at an attractive P/E ratio of 11.41 as of the last twelve months ending Q1 2024. The company's revenue growth is noteworthy, having increased by 18.03% during the same period, which is a testament to its robust operational performance. Additionally, VICI's dividend yield stands at an appealing 5.87%, further underlining its potential as an income-generating investment.
Highlighting the company's financial health and investment appeal, two InvestingPro Tips reveal that VICI has raised its dividend for 6 consecutive years and is trading at a low EBIT valuation multiple. These factors may appeal to investors looking for consistent income and value-oriented opportunities in the specialized REITs industry. For those interested in deeper analysis, more InvestingPro Tips for VICI are available, which can be accessed with the exclusive coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With the next earnings date approaching on July 24, 2024, and an analyst fair value target of $35, VICI's financial standing is worth monitoring closely for informed investment decisions.
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