2023-04-24 10:13:29 ET
JPMorgan on Monday initiated coverage of Kite Realty ( NYSE: KRG ) with a Neutral rating, given its cautious outlook for strip center REITs amid high profile tenant issues and bad debt levels.
"Sentiment for strips has turned more cautious in 2023, with the focus shifting from upside potential to downside risks," said analyst Michael Mueller. "We think KRG's smaller relative mix of grocer/necessity tenants makes the stock a bit more sensitive to perceived changes in the economic environment."
Mueller believes external growth will not be a large near-term driver for Kite ( KRG ), given "the state of the deals market as well as it having a smaller development/redevelopment program."
"KRG generally trades at relative discounts compared to both the strip center and overall REIT group, which presents a re-valuation opportunity," he said.
JPMorgan set a $23 price target for Kite ( KRG ), implying 8.7% potential upside to its last close.
Shares -1% in morning trade.
Its stance contrasts bullish ratings from SA Quant and Wall Steet analysts.
More on Kite Realty
Kite Realty: Fly High With This Undervalued Retail REIT
Kite Q4 results beat on same-property NOI growth, lower costs
Kite Realty: Quality Shopping Centers At A Discount
For further details see:
JPMorgan initiates Kite Realty at Neutral given cautious outlook for strip center REITs