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On Friday, Goldman Sachs analyst Caitlin Burrows revised the rating for First Industrial Realty Trust (NYSE: NYSE:FR), elevating it from Sell to Neutral. Accompanying the upgrade is an increase in the price target to $59.00, up from the previous target of $52.00. The stock currently trades at $55.77, near its 52-week high of $57.35, with InvestingPro data showing a "GOOD" overall financial health score of 3.0 out of 5.
Burrows forecasts that First Industrial Realty Trust will experience earnings growth in 2025, which is projected to surpass that of peer Prologis (NYSE:PLD) but fall short of Terreno Realty (NYSE:TRNO). The analyst’s updated FFO (funds from operations) per share estimate for 2025 stands at $2.88, which is slightly below the FactSet consensus by 30 basis points. According to InvestingPro, the company has maintained dividend payments for 13 consecutive years, with a current dividend yield of 3.19% and impressive dividend growth of 39.06% over the last twelve months.
The analyst noted that First Industrial Realty Trust’s stock is trading at a multiple of 21.2 times the next twelve months’ (NTM) FFO, representing a 26% premium relative to other REITs, aligning closely with its historical premium of 27%. The increased price target of $59.00 is based on a revised Q5-Q8 AFFO (adjusted funds from operations) target multiple of 23.5 times, up from 22.8 times. Currently, the company’s shares are trading at 24.2 times NTM AFFO. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its Fair Value. Discover more insights about FR and 1,400+ other stocks through comprehensive Pro Research Reports, available exclusively to InvestingPro subscribers.
Burrows also introduced estimates for the year 2027, which contributed to the reevaluation of the stock’s rating. The analyst’s outlook for growth in each of the years from 2025 to 2027, coupled with the 2025 estimate that nearly aligns with the consensus and the adjusted price target, underpinned the decision to upgrade First Industrial Realty Trust to Neutral from Sell.
The performance of First Industrial Realty Trust’s shares since being added to the Americas Sell List on March 21, 2023, was also a factor in the rating change. The shares have seen an increase of 8.5%, whereas the REIT index (RMZ) has risen by 19.2% during the same timeframe.
In other recent news, First Industrial Realty Trust reported impressive earnings results, with funds from operations (FFO) per share surpassing both consensus estimates and Truist Securities’ projections for the fourth quarter and the full year of 2025. The company achieved 1.4 million square feet of development leasing, significantly exceeding the anticipated 400,000 square feet, demonstrating strong operational capabilities. First Industrial Realty Trust also issued guidance for 2025 FFO per share at $2.92, above the consensus estimate of $2.87 and Truist Securities’ estimate of $2.89. Additionally, the company anticipates cash same-store net operating income growth of 6.5%, outperforming Prologis Inc.’s guidance of 4.5%.
Truist Securities maintained a Buy rating on the company, citing its robust performance and market position. Meanwhile, Deutsche Bank (ETR:DBKGn) initiated coverage with a Hold rating, highlighting First Industrial Realty Trust’s geographic and tenant diversification as positive factors. However, the firm expressed concerns about the national slowdown in demand and potential risks associated with the company’s significant presence in Southern California and speculative development strategy. Despite these challenges, Deutsche Bank noted that First Industrial Realty Trust could still have one of the stronger earnings growth profiles within its peer group in 2025, thanks to better sub-market exposure.
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