Citizens upgrades Lexington Realty Trust stock rating on asset sales

Investing.com - Citizens has upgraded Lexington Realty Trust (NYSE:LXP) from Market Perform to Market Outperform and set a price target of $11.50. The stock, currently trading at $9.52, has shown strong momentum with a 23.2% return over the past six months and is approaching its 52-week high of $9.95.

The upgrade follows Lexington’s sale of two recently delivered vacant developments, which Citizens notes has removed an overhang on the stock while proving accretive to earnings and strengthening the balance sheet. According to InvestingPro data, the company maintains a healthy current ratio of 1.48, with liquid assets exceeding short-term obligations.

The sale eliminates what Citizens describes as a "key hurdle," allowing Lexington to operate its strategic plan with limited overhang while deploying proceeds toward debt redemption and eliminating vacancy operating expense drag.

Citizens believes Lexington can now allocate resources to its Midwest and Sunbelt operating portfolio, which should benefit from the current administration’s emphasis on reviving U.S. manufacturing capabilities.

The firm points out that Lexington’s shares currently trade at a 6x turn discount to industrial REIT peers at mid-13x 2026 estimated FFO per share, representing an improvement from the three-year multiple discount of 6.5x. The $2.82B market cap REIT offers a compelling 5.7% dividend yield and has maintained dividend payments for 32 consecutive years. InvestingPro analysis suggests the stock is currently trading above its Fair Value, with 12 additional exclusive insights available to subscribers.

In other recent news, LXP Industrial Trust announced the pricing of its $150 million notes tender offer. The real estate investment trust will pay $1,076.36 per $1,000 principal amount for notes tendered by the early deadline, which includes an early tender premium of $30.00 per $1,000. This development comes as LXP Industrial Trust reported its second-quarter 2025 earnings, highlighting increased portfolio occupancy and stable financial health. The company’s financial guidance for 2025 has been slightly adjusted, indicating cautious optimism in a competitive market. These recent developments reflect the company’s ongoing strategic efforts to manage its financial operations and market presence effectively.

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