KeyBanc has raised the price target for Kite Realty Group (NYSE: NYSE:KRG) shares to $28.00, up from the previous target of $25.00, while maintaining an Overweight rating.
The firm's analyst highlighted a favorable near-term outlook for Kite Realty's portfolio, driven by robust leasing demand and a scheduled acceleration in rent commencements over the coming quarters. The analyst also pointed to the company's improving long-term, stabilized internal growth profile.
Kite Realty's financial health appears to be on solid ground, with recent efforts to strengthen the balance sheet. This includes a $350 million, seven-year unsecured notes offering at a 4.95% coupon, which will facilitate debt repayment due in 2025 and provide clear financial leeway through 2026.
The company is also expected to engage in additional property dispositions, such as those related to City Center, which should further enhance its financial position and potentially enable a strategic shift towards growth.
The analyst noted that Kite Realty's shares are currently trading at an implied capitalization rate of 7%, which is considered attractive and offers a significant spread compared to the Strip sector. The firm anticipates potential earnings upside and multiple expansion due to the high growth expected in the near term.
Following Kite Realty's second-quarter earnings for 2024, KeyBanc has revised its estimates upwards to reflect the company's quarterly performance, which surpassed their previous model, and the improved outlook.
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