B.Riley sets Modiv stock Buy rating, $18 price target

Tuesday, B.Riley analysts initiated coverage on Modiv (NYSE:MDV), currently trading at $15.56 with a market capitalization of $174.5 million, with a Buy rating and a price target of $18.00. The firm highlighted the real estate investment trust’s (REIT) focus on manufacturing industrial properties and the potential for a market re-rating due to its unique position in the single-tenant net lease (STNL) sector. According to InvestingPro analysis, the stock appears to be trading below its Fair Value, suggesting potential upside opportunity.

Modiv’s portfolio has shifted almost entirely towards manufacturing industrial properties, distinguishing it within the STNL space. B.Riley analysts pointed out that despite the portfolio’s internal management and clarity on its non-core assets, Modiv’s stock is trading at a significant adjusted funds from operations (AFFO) per share multiple discount compared to its peers and the broader STNL sector. The company maintains an impressive gross profit margin of 92.3%, reflecting efficient property management. For deeper insights into Modiv’s financial metrics and 10+ additional ProTips, check out the comprehensive analysis available on InvestingPro.

The analysts also noted that Modiv trades at a 36.1% discount against its reported reNAV per share, which is based on a third-party appraisal of the company’s assets. In comparison to B.Riley’s own reNAV per share calculations, the discount stands at 17.3%. This suggests that the private market values Modiv’s properties well above the current stock price. The stock currently offers a substantial 7.52% dividend yield, and analyst price targets range from $17.50 to $19.00, indicating potential upside.

The coverage assumes that the discount in Modiv’s stock price may be partly due to its micro-cap status, which could limit the number of institutional investors. However, the analysts believe that Modiv’s strategic focus on manufacturing industrial real estate could serve as a catalyst for re-rating, especially given the current U.S. trade policies that might favor domestic manufacturing. Notably, InvestingPro data shows the stock has a beta of -0.25, indicating low correlation with market movements, and maintains a GOOD overall Financial Health Score of 2.7.

B.Riley’s positive outlook on Modiv reflects an anticipation that investors will recognize the company’s unique strategy in the STNL market. The analysts suggest that Modiv’s alignment with domestic manufacturing could be increasingly valued in the context of restrictive trade policies, potentially leading to an adjustment in the company’s stock valuation.

In other recent news, Modiv Industrial, Inc. reported its fourth-quarter 2024 earnings, surpassing Wall Street expectations with an EPS of $0.07, significantly higher than the anticipated $0.03. The company also reported revenue of $11.73 million, slightly above the forecast of $11.55 million. Additionally, Modiv Industrial has increased its 2025 Adjusted Funds From Operations (AFFO) forecast to $1.39 per fully diluted share following the repurchase of 7.5% of its Series A Preferred shares. This strategic financial move is expected to generate $276,000 in annual savings. Furthermore, Modiv Industrial amended its sales agreement for its Class C common stock, allowing for the issuance of shares up to $50 million, with $40.3 million still available for issuance. The company also announced its 2025 annual meeting of stockholders, scheduled for July 23, 2025. These developments reflect Modiv Industrial’s ongoing efforts to manage its financial strategy and enhance shareholder value.

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