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On Wednesday, BMO Capital Markets adjusted its outlook on Nexus Industrial REIT (NXR-U:CN) (OTC: EFRTF), reducing the price target to Cdn$8.00 from the previous Cdn$8.25. The firm maintained its Market Perform rating on the stock. This adjustment follows the company’s recent financial disclosures and market activity.
Michael Markidis, an analyst at BMO Capital, provided insights into the rationale behind the revised price target. Nexus Industrial REIT’s Net Free Funds from Operations (NFFO) matched BMO Capital’s estimate of $0.19, despite the company facing challenges due to the unexpected failure of two tenants. Markidis highlighted that Nexus Industrial REIT is anticipating mid-single-digit Same-Property Net Operating Income (SP-NOI) growth in 2025.
The analyst noted that the company’s strategic dispositions have had a positive impact on both the balance sheet and the composition of its portfolio. Furthermore, the lease-up and completion of several development projects are seen as potential sources of upside for the REIT.
The decision to lower the price target was attributed to "modest adjustments" to the firm’s Net Asset Value (NAV) and Funds from Operations (FFO) estimates for Nexus Industrial REIT. Despite the reduction in the target price, BMO Capital’s outlook on the stock remains at Market Perform, indicating a neutral stance on its future performance.
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