ADC - Mizuho turns bullish on Agree Realty on strong balance sheet defensive tenant base

2023-06-22 08:18:08 ET

Mizuho Securities on Thursday upgraded Agree Realty ( NYSE: ADC ) to Buy from Neutral as it believes the REIT is better built than most to navigate a higher-for-longer macroeconomic backdrop.

"We believe the recent underperformance vs. peers offers an attractive entry point for investors looking to add exposure to a REIT with high investment-grade tenancy, formidable liquidity, and above-average growth potential," said analyst Haendel St. Juste.

"ADC's high-credit tenancy & well-positioned balance sheet offer "defense", while its formidable liquidity/advantaged access to capital allow it to also play "offense" and ramp up acquisitions, especially as competition remains subdued, and with cap rates poised to rise further, driving wider spreads," he added.

ADC has among the most defensive tenant base in REITs, with 68% of its tenants investment-grade rated, St. Juste noted.

Price target was maintained at $70, implying 7.4% potential upside to ADC's last close.

Shares of Agree Realty ( ADC ), which declined 7.6% YTD, rose 2.8% before the bell in light trading volume.

Mizuho's views are in line with bullish ratings from SA Quant as well as Wall Street analysts .

Now read - Agree Realty: A Steady REIT Income Play

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