Bullish indicating open at $55-$60, IPO prices at $37
On Friday, Goldman Sachs analyst Caitlin Burrows provided a positive outlook on Terreno Realty Corp (NYSE:TRNO), upgrading the stock from Neutral to Buy and raising the price target to $77.00 from the previous $65.00. The upgrade comes after Terreno reported fourth-quarter 2024 funds from operations (FFO) of $0.62, aligning with the FactSet consensus. The stock, currently trading at $66.82, has shown strong momentum with a 13% year-to-date return and is trading near its 52-week high of $71.63. According to InvestingPro analysis, the company appears to be trading above its Fair Value, with a P/E ratio of 34.9x.
Burrows highlighted that Terreno’s forecasted average annual growth rate of 9.1% from 2025 through 2027 leads the real estate investment trust (REIT) sector covered by Goldman Sachs. The firm’s 2025 core FFO estimates have been slightly increased by 70 to 130 basis points per year, and 2027 estimates have now been introduced. Supporting this optimistic outlook, InvestingPro data shows impressive revenue growth of 18.2% over the last twelve months, with analysts expecting continued sales growth this year. The company has also maintained its dividend payments for 15 consecutive years, with an 8.9% dividend growth in the latest period.
The analyst believes Terreno will benefit from sector-wide improvements in absorption, despite it being below trend. Additionally, company-specific factors such as accretive acquisitions made in late 2024, expectations for 2025, absence of near-term refinancing issues, and strong same-store net operating income (SS NOI) due to its smaller, strategically located infill properties are expected to drive performance. These locations are currently focusing on rate over occupancy, which is viewed as a positive move. InvestingPro analysis reveals the company maintains a strong financial health score of 2.93 (rated as "GOOD"), with a moderate debt level and impressive gross profit margins of 74.4%.
The revised 12-month price target of $77.00 is based on a target Q5-Q8 adjusted funds from operations (AFFO) multiple of 36.1 times, up from a near-term AFFO multiple of 35.2 times. This adjustment reflects the analyst’s confidence in Terreno’s growth prospects and operational strategy moving forward. For deeper insights into Terreno’s valuation and growth metrics, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes over a dozen additional ProTips and extensive financial analysis.
In other recent news, Terreno Realty Corporation reported its fourth-quarter 2024 financial results, which have positively influenced analysts’ perspectives. BMO Capital Markets adjusted its price target for Terreno Realty from $71.00 to $73.00 while maintaining a "Market Perform" rating. This indicates a neutral outlook, suggesting the stock may perform in line with the broader market. JMP Securities also reaffirmed its "Market Outperform" rating with a $72.00 price target, citing the company’s robust financial health and strategic market positioning. Deutsche Bank (ETR:DBKGn), however, initiated coverage with a "Hold" rating and a $60.00 price target, expressing concerns about Terreno’s ability to secure accretive deals and maintain its historical valuation premium.
Additionally, Terreno Realty announced a change in its board composition, with director Dennis Polk deciding not to seek re-election at the 2025 Annual Meeting of Stockholders. The company clarified that Polk’s departure is not due to any disagreements with its operations or policies. Investors are likely to monitor these developments closely, as they may impact the company’s strategic direction and governance. Terreno Realty’s focus on maintaining high occupancy rates and its strategic investments in industrial properties across key U.S. coastal markets continue to be a focal point for analysts and investors alike.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.