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On Thursday, Citizens JMP analysts maintained a positive stance on Global Net Lease (NYSE:GNL) shares, reiterating a Market Outperform rating and a $9.00 price target. The company has recently reported its first quarter 2025 adjusted funds from operations (AFFO) per share slightly above expectations and confirmed its full-year outlook. According to InvestingPro data, GNL currently trades at $7.53, with analyst targets ranging from $8 to $10, suggesting potential upside. The stock offers a substantial 10.09% dividend yield and has delivered a 19.5% return over the past year. Analysts highlighted the significance of Global Net Lease’s ongoing leverage reduction strategy, particularly noting the advancement made through the planned $1.8 billion sale of a multi-tenant retail portfolio.
The initial tranche of this multi-tenant retail sale has been completed, marking a key step in the company’s strategy. Following this transaction, Global Net Lease has seen an improvement in its debt to EBITDA ratio, which has decreased to 6.7x from 7.6x at the end of the previous year. The company’s liquidity has also been bolstered by this sale, and operational improvements in its portfolio are anticipated as the remaining parts of the sale are expected to be finalized by the end of the second quarter. InvestingPro analysis shows the company is currently trading at a low EBITDA multiple, though short-term obligations exceed liquid assets.
Analysts at Citizens JMP believe that the progress Global Net Lease has made in reducing its leverage is not yet fully recognized in its current stock valuation. The shares are currently trading at just under 8 times the estimated 2025 AFFO per share, which is significantly lower than the average for the net-lease real estate investment trust (REIT) sector at 13.2 times. They suggest that as Global Net Lease continues to improve its balance sheet and transitions to becoming a pure-play net-lease REIT, the stock is likely to experience a positive re-rating. For deeper insights into GNL’s valuation and growth potential, including access to 6 additional ProTips and comprehensive financial metrics, visit InvestingPro.
In other recent news, Global Net Lease announced significant developments that have drawn attention from investors and analysts. The company has completed the first phase of a $1.8 billion shopping center portfolio sale, a strategic move aimed at reducing leverage, as noted by JMP Securities. This sale is expected to simplify Global Net Lease’s structure and decrease corporate overhead, aligning with the company’s goal of achieving a high-6x debt-to-EBITDA ratio. Fitch Ratings has placed Global Net Lease on a positive rating watch following the announcement of this sale, which could accelerate the company’s deleveraging efforts.
In governance-related updates, Global Net Lease has amended its bylaws to empower shareholders, allowing them to alter, amend, or repeal bylaws with a majority vote. This change is seen as a step toward enhancing shareholder democracy and aligning with broader corporate governance trends. On the financial front, Truist Securities maintained a Hold rating on the company, adjusting its AFFO projections due to increased asset sales, which are expected to lead to a decline in AFFO per share for the coming years.
B.Riley analysts have resumed coverage of Global Net Lease with a Neutral rating, expressing concerns over the company’s increased focus on office properties, which could impact long-term growth prospects. The company’s recent actions, including the sale of non-core properties and the implementation of a share repurchase program, reflect ongoing efforts to optimize its portfolio and improve financial metrics. However, Global Net Lease’s valuation remains low compared to its peers, as noted by JMP Securities, despite these strategic initiatives.
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