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On Friday, Citi analysts maintained a Neutral rating and a $35.00 price target for STAG Industrial (NYSE: STAG), a REIT currently trading at $36.16. According to InvestingPro data, the company has maintained dividend payments for 15 consecutive years and shows strong financial health with a current ratio of 1.38. The analysts expressed optimism about potential increases in funds from operations (FFO) and same-store net operating income (SSNOI) guidance due to accelerated new leasing activities. Recent leasing activity commenced at approximately 1.4 million square feet this quarter, compared to around 280,000 square feet in each of the previous two quarters.
The analysts also noted that tenant credit headwinds appear to be moderating. STAG Industrial had a 50 basis points general bad debt cushion, with an additional 25 basis points reserved for American Tire. However, only 1 basis point from the general reserve and 7 basis points for American Tire were utilized, primarily related to some free rent on assumed leases.
Despite these positive indicators, the analysts highlighted a potential earnings headwind of approximately 1 cent from possibly slower acquisition activity. STAG Industrial’s acquisition guidance is set between $350 million and $650 million, while first-quarter activity amounted to $43 million.
While STAG Industrial’s stock has modestly outperformed its industrial peers this week, with a 1.63% return over the past week, Citi analysts believe there could be more near-term relative upside. This outlook is based on the potential positive impact of the factors mentioned. For deeper insights into STAG Industrial’s valuation and growth prospects, including additional ProTips and comprehensive financial analysis, visit InvestingPro, where you’ll find exclusive research reports and advanced metrics for over 1,400 US stocks.
In other recent news, STAG Industrial Inc. reported impressive financial results for the first quarter of 2025, surpassing analyst expectations. The company achieved an earnings per share (EPS) of $0.49, significantly higher than the anticipated $0.18, while revenue reached $205.57 million, exceeding the forecasted $200.84 million. Moody’s Ratings upgraded STAG Industrial’s credit rating to Baa2 from Baa3, citing the company’s solid operating performance and financial flexibility. The stable outlook reflects expectations of consistent operating cash flows and a cautious capital strategy.
STAG Industrial maintained its 2025 guidance, with future EPS forecasts remaining stable. The company has already leased 78.5% of the operating portfolio square feet expected for 2025, indicating strong leasing activity. The firm’s liquidity stands at $1 billion, showcasing its strong financial health. Despite these positive developments, broader macroeconomic uncertainties may impact investor sentiment. Analysts from Citi and Raymond (NSE:RYMD) James noted strong leasing activity and early renewals, reflecting tenant demand amidst market uncertainties.
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