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Investing.com - Raymond (NSE:RYMD) James raised its price target on Federal Realty Investment Trust (NYSE:FRT) to $125.00 from $120.00 on Tuesday, while maintaining an Outperform rating on the stock. The $8.2 billion market cap REIT currently offers a 4.66% dividend yield and has maintained dividend payments for an impressive 53 consecutive years, according to InvestingPro data.
The firm’s new price target represents approximately 23 times its estimated 2025 AFFO (Adjusted Funds From Operations) per share for the real estate investment trust.
Raymond James noted that Federal Realty is expected to generate one of the highest AFFO per share growth rates within its peer group, justifying a premium valuation multiple compared to the sector average of 20 times.
The firm believes this premium multiple is warranted given what it describes as Federal Realty’s "best-in-class real estate and track record of meaningful cash flow per share growth."
Despite the positive outlook and price target increase, Raymond James indicated it sees limited multiple expansion potential in the near term, as the current trading level of approximately 23 times 2024 estimated AFFO already reflects the market’s high growth expectations for the company.
In other recent news, Federal Realty Investment Trust has announced a strategic agreement with Mercedes-Benz (OTC:MBGAF) High-Power Charging to install over 500 ultra-fast electric vehicle charging stalls at 50 retail centers across the United States. This partnership names Mercedes-Benz HPC as the preferred EV charging provider for Federal Realty, with initial deployments planned in locations such as Phoenix, Arizona; Broomall, Pennsylvania; and Pembroke Pines, Florida. In related developments, Stifel has raised its price target for Federal Realty to $110, maintaining a Hold rating, following several transactions and development updates by the company. Meanwhile, Barclays (LON:BARC) has initiated coverage of Federal Realty with an Overweight rating and a price target of $106, noting the company’s strong retail and mixed-use real estate holdings. Conversely, JPMorgan has downgraded Federal Realty from Overweight to Neutral, assigning a price target of $108, despite acknowledging the portfolio’s strength and long-term potential. These developments reflect varying perspectives among analysts regarding Federal Realty’s growth outlook and strategic initiatives.
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