BTIG maintains Buy on Netstreit stock with $19 price target

Tuesday saw BTIG reaffirm its Buy rating on Netstreit Corp . (NYSE:NTST) stock, maintaining a $19.00 price target. With a current market capitalization of $1.17 billion, Netstreit Corp. reported its fourth-quarter 2024 adjusted funds from operations (AFFO) per share at $0.32, which was a cent higher than BTIG’s estimate. The company managed to surpass expectations by controlling operating expenses and interest expenses more effectively than anticipated, despite lower rental revenue. InvestingPro analysis indicates the company maintains robust liquidity with a current ratio of 5.83, suggesting strong financial flexibility.

During the last quarter, Netstreit acquired properties worth $195.1 million at an average capitalization (cap) rate of 7.4%, marking a record in quarterly volumes for the company. A significant portion of the annualized base rent (ABR) generated from these acquisitions, approximately 48.6%, came from tenants with investment-grade profiles. Additionally, Netstreit sold 30 properties for a total of $59 million at an average cap rate of 7.1%. This strategic portfolio management has contributed to the company’s impressive revenue growth of 27.72% over the last twelve months.

Looking ahead, Netstreit has introduced its AFFO per share guidance for the fiscal year 2025, projecting a range between $1.27 and $1.30. BTIG’s current estimate stands just below the midpoint of this guidance at $1.28. While InvestingPro data shows the company wasn’t profitable over the last twelve months, analysts expect profitability this year. The company’s conservative outlook on investment volumes for the year is attributed to the diversification of their tenant base and the current cost of capital. Netstreit anticipates net investments ranging from $75 million to $125 million for the fiscal year, while maintaining its attractive 5.9% dividend yield.

The company also took steps to decrease its exposure to certain tenants. Notably, Netstreit reduced its ABR exposure to Dollar General (NYSE:DG) by approximately 250 basis points and to Walgreens by 100 basis points. This move is part of Netstreit’s strategy to maintain a defensive portfolio, which currently boasts 87.5% of ABR.

BTIG views Netstreit’s capital structure favorably, noting no debt maturities until 2027 and the company’s commitment to maintaining a defensive portfolio. InvestingPro analysis supports this view, assigning the company a "GOOD" Financial Health score, with particularly strong marks in cash flow management. Following the latest financial results and company activities, BTIG has stated that their estimates are under review. For deeper insights into NTST’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, NETSTREIT Corp. has disclosed the tax treatment for its 2024 common stock distributions. The company stated that all dividends distributed throughout the year were classified as ordinary dividends, with 92.5159% designated as such and the remaining 7.4841% as non-dividend distributions. Additionally, none of the dividends were reported as qualified dividends, impacting shareholders’ federal tax obligations. Meanwhile, Raymond (NSE:RYMD) James adjusted its price target for NETSTREIT to $17.00 from $19.00, while maintaining a Strong Buy rating. This follows NETSTREIT’s announcement of securing $275 million in financial commitments, including a $175 million term loan with a fixed interest rate of 5.12%. The company also extended its credit facilities, deferring major debt maturity to 2028. Furthermore, NETSTREIT appointed Sofia Chernylo as the new Senior Vice President and Chief Accounting Officer, effective January 13, 2025. Chernylo, a seasoned professional with extensive experience in finance and accounting, joins from Tupperware (OTC:TUPBQ) Brands Corporation.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.