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Tuesday, on the New York Stock Exchange, Agree Realty Corporation (NYSE:ADC) saw an upgrade in its stock rating by Barclays (LON:BARC) from Underweight to Equal Weight, accompanied by a slight increase in the price target from $64.00 to $65.00. The revision in rating and target by Barclays’ analyst Richard Hightower comes after a period of underperformance by Agree Realty in comparison to the broader Net Lease sector. Currently trading at $74.08, the stock has demonstrated strong momentum with a 35.29% return over the past year, though InvestingPro analysis suggests the stock is trading above its Fair Value.
Hightower attributes the upgrade to two main factors. Firstly, Agree Realty’s valuation has become more appealing both absolutely and relatively following its lag in performance since Barclays initiated coverage on the Net Lease sector in late 2024. Specifically, since December 16, 2024, ADC’s stock has increased by a modest 0.7%, in contrast to a 5.6% gain for the Net Lease index and a 1.3% rise for the RMZ. The company maintains a strong dividend profile, with a current yield of 4.1% and an impressive track record of 12 consecutive years of dividend increases.
Secondly, the analyst points to the softening economic outlook in the United States, suggesting that investors might increasingly favor Agree Realty. Hightower notes the company’s portfolio benefits from superior tenant credit quality and a higher proportion of investment-grade weightings. Additionally, he highlights that Agree Realty is not dependent on capital markets to achieve its external growth targets for 2025, having pre-funded all of its equity capital needs in the previous year. InvestingPro data reveals the company’s strong financial health with a GREAT overall score and robust revenue growth of 14.81% in the last twelve months. Get access to 8 more exclusive ProTips and comprehensive analysis with an InvestingPro subscription.
The revised price target of $65.00 reflects a modest increase from the previous target but signals a change in perspective from Barclays on the potential of Agree Realty’s stock. This adjustment in the investment firm’s outlook could influence the market’s view on Agree Realty as it aligns with the company’s current financial strategy and market position. The stock’s current metrics, including liquidity ratios and comprehensive financial analysis, are available in the detailed Pro Research Report on InvestingPro.
In other recent news, Agree Realty Corporation has been the focus of several analyst updates and strategic assessments. Stifel analysts have maintained their Buy rating with a price target of $81, citing the company’s strong financial health and growth prospects for 2025. The firm highlighted Agree Realty’s proactive measures in raising equity and maintaining a portfolio with a significant portion of investment-grade tenants. Meanwhile, RBC Capital Markets has adjusted its price target slightly downward to $79, retaining an Outperform rating. This adjustment follows Agree Realty’s acquisition volumes in 2024, which exceeded both the company’s guidance and RBC Capital’s estimates. Despite a lower guidance for 2025 investment volumes, RBC Capital acknowledges the company’s conservative approach. Additionally, Evercore ISI has issued a new Outperform rating with a price target of $82, emphasizing Agree Realty’s proven execution and substantial external growth opportunities. These developments reflect a positive outlook from analysts, highlighting Agree Realty’s strategic initiatives and market position.
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