2023-04-18 12:40:55 ET
- JMP Securities on Tuesday initiated coverage on LXP Industrial Trust ( NYSE: LXP ) with a Market Perform rating as it believes the stock is fairly valued.
- "LXP has been de-emphasizing its exposure to the office sector over the last 5+ years and sits in the final stages of a strategic shift, though a declining appetite for office investments suggests the final stage of this transformation may be extended," analyst Mitch Germain noted.
- "Any potential sales would likely reflect distressed pricing in the near term," he cautioned.
- JMP said LXP's ( LXP ) leverage trends higher relative to industrial REIT peers and sees limited catalysts to reduce debt in the near term.
- "Impending debt maturities are likely to result in some earnings dilution, given the low in-place coupon," said Germain.
- LXP ( LXP ) trades at a discount to industrial REIT peers, but JMP said this discount was fair, owing to office sector exposure risk, lower earnings growth prospects, and higher-than-average leverage.
- JMP's stance is in line with Hold ratings from SA Quant and Wall Street analysts.
- Read why SA contributor Justin Purohit thinks LXP ( LXP ) is worth further consideration.
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JMP initiates LXP Industrial at Market Perform as stock is fairly valued