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On Thursday, JMP analysts maintained a positive outlook on Getty Images Holdings Inc. (NYSE: GETY), reiterating a Market Outperform rating and a $34.00 price target. The firm’s confidence in the stock stems from Getty Realty Corp (NYSE:GTY).’s robust earnings growth, revenue diversification, and strong portfolio performance, despite a recent tenant bankruptcy. According to InvestingPro data, the stock has experienced significant pressure, trading near its 52-week low of $1.90, with a -49.23% return over the past six months. The company maintains a healthy gross profit margin of 73.06%, suggesting strong operational efficiency.
The JMP analyst highlighted the company’s direct investment strategy and the resulting revenue diversification as key factors in supporting the positive rating. Senior management, including President and CEO Christopher Constant and Executive Vice President, CFO and Treasurer Brian Dickman, recently met with investors in Boston to discuss these strategies and the company’s financial health. InvestingPro’s comprehensive analysis shows the company maintains a FAIR financial health score of 2.19, with revenue growing at 2.48% over the last twelve months. For deeper insights into Getty’s financial metrics and growth potential, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
Getty Realty Corp. has demonstrated a consistent earnings and dividend growth profile, with an increase of over 5% annually since 2019. The company’s dividend has seen a rise for 11 consecutive years, offering a 6.1% yield, which is about 50 basis points higher than the average for net lease real estate investment trusts (REITs).
Management’s ability to source investments directly has been instrumental in the company’s above-average earnings growth. This approach, combined with lease escalators of 1.8% per annum, has contributed to its strong performance in a challenging macroeconomic environment. Additionally, the balance sheet reflects low leverage, and the expected capital deployment for 2025 has been pre-funded.
The analyst also noted that the majority of Getty’s rental income is generated from top metropolitan markets with prime corner locations, and its portfolio coverage ratio stands at a healthy 2.6 times. Despite trading at a discount to the broader net-lease REIT sector, with shares currently valued at mid-12 times 2025 estimated adjusted funds from operations (AFFO) per share, the analyst believes that Getty’s track record justifies a premium multiple. Hence, the $34 price target is based on an approximate 14 times 2025 estimated AFFO per share. InvestingPro data reveals the company trades at an EV/EBITDA multiple of 7.85x, with analysts setting price targets ranging from $2.45 to $7.70, suggesting potential upside from current levels.
In other recent news, Getty Images Holdings Inc. reported strong financial results for the fourth quarter of 2024, with revenue reaching $247.3 million, surpassing the forecast of $245.49 million. The company also achieved an adjusted EBITDA of $80.6 million, marking an 11.7% increase. Full-year revenue for 2024 was reported at $939.3 million, up 2.5% from the previous year. In terms of analyst activity, Citi resumed coverage of Getty Images with a Neutral rating and set a price target of $2.45, citing cautiousness due to near-term revenue challenges. Meanwhile, Benchmark revised its price target for Getty Images to $4.50, down from $6.00, while maintaining a Buy rating. The adjustment was influenced by the company’s fourth-quarter revenue performance, which exceeded Benchmark’s projections by 1%, largely due to strong data licensing revenue. Furthermore, Getty Images is preparing for a merger with Shutterstock (NYSE:SSTK), expected to close in the second half of 2025, which analysts believe could lead to significant cost savings and a strategic shift towards subscription revenue models.
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