Citi reiterates Buy rating on Tanger Factory Outlet Centers stock at $36

Investing.com - Citi has reiterated its Buy rating on Tanger Factory Outlet Centers (NYSE:SKT) stock with a price target of $36.00 following recent meetings with the company’s senior management. According to InvestingPro data, the stock currently trades at $31.27, with analysis indicating it may be overvalued at current levels.

The meetings with Tanger’s leadership team, including the CIO and CFO Michael Bilerman, focused on assessing growth prospects for the coming years and evaluating the company’s valuation metrics.

Citi highlighted three key factors supporting its Buy rating: Tanger’s differentiated portfolio of value-oriented outlets and select lifestyle centers with revenue upside potential, lower-than-average capital expenditure requirements, and a strong balance sheet position.

The revenue growth potential stems specifically from remerchandising opportunities, converting temporary tenants to permanent ones, and benefits from a higher annual lease roll, according to Citi’s analysis.

Investors also discussed external growth opportunities during the meetings, including whether recent acquisitions by competitors might increase competition for Tanger in sourcing new deals.

In other recent news, Tanger Inc. reported its Q1 2025 earnings, showing a mixed financial performance. The company posted earnings per share of $0.17, which fell short of the $0.21 forecast, but revenue reached $135.36 million, surpassing the expected $122.99 million. Despite the revenue beat, the company saw a decline in its stock after the earnings release. Additionally, Tanger Inc. announced a new $200 million share repurchase program, replacing the previous $100 million authorization set to expire soon. This move reflects the company’s confidence in its financial strength and commitment to shareholder value.

In terms of analyst activity, Barclays (LON:BARC) initiated coverage on Tanger Factory Outlet Centers with an Equalweight rating, setting a price target of $33.00. The firm noted Tanger’s improvements in tenant base quality and cost of capital usage but expressed concerns about potential tariff-driven challenges. Moreover, Tanger’s recent strategic acquisition of the Pinecrest lifestyle center and the sale of a non-core center in Michigan are part of its ongoing efforts to optimize its portfolio. The company also reported a 6.4% increase in its dividend, signaling confidence in its future cash flows.

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