Berenberg initiates coverage on Essential Properties Realty Trust stock with Buy rating

Investing.com - Berenberg has initiated coverage on Essential Properties Realty Trust (NYSE:EPRT) with a Buy rating and a price target of $36.00. The company, which offers a 4.1% dividend yield and has raised its dividend for 7 consecutive years, currently trades near its InvestingPro Fair Value.

The investment firm highlighted that approximately 93% of Essential Properties’ annualized base rent (ABR) comes from service- and experience-oriented tenants, whose businesses are characterized by a low level of e-commerce penetration.

Essential Properties’ portfolio includes tenants operating more than 600 different business concepts across 48 states in the U.S., with no single tenant currently contributing more than 3.7% of the ABR.

Berenberg noted that the company strategically aims to minimize concentration risk, targeting no single tenant to contribute more than 5% to ABR, and no more than 1% of ABR to come from any single property.

The firm pointed to Essential Properties’ strong track record of tenant solvency, with annualized credit loss of just 30 basis points of ABR since the company’s inception in 2016, and a robust unit-level rent coverage of 3.4x.

In other recent news, Essential Properties Realty Trust has been the focus of several analyst updates and company announcements. Truist Securities reiterated its Buy rating on the company, highlighting $219 million in acquisitions completed during the third quarter and an additional $212 million in potential transactions. Meanwhile, Evercore ISI upgraded the stock from In Line to Outperform, citing a strong balance sheet and above-average funds from operations growth, and raised the price target to $36.00. Cantor Fitzgerald also initiated coverage with an Overweight rating and a $35.00 price target, suggesting a premium valuation compared to its peers.

In contrast, Stifel lowered its price target from $36.00 to $35.00 but maintained a Buy rating, expressing continued optimism after meetings with the company’s management. Essential Properties Realty Trust also released its 2024 Corporate Responsibility Report, made available on its website and filed with the Securities and Exchange Commission. The report did not include additional financial results or operational updates. These developments reflect ongoing interest and analysis from the investment community regarding Essential Properties Realty Trust.

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