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Investing.com - JMP analyst Mitch Germain has reiterated a Market Perform rating on Agree Realty (NYSE:ADC), noting that while the company has positive attributes, its current valuation keeps the firm on the sidelines. According to InvestingPro data, the stock trades at a P/E ratio of 40.6x and offers a dividend yield of 4.25%, with a track record of raising dividends for 12 consecutive years.
The analyst highlighted Agree Realty’s diversified, high-credit quality retail portfolio and low-levered balance sheet as positive factors. JMP’s research indicates that despite recent turbulence in public markets, both operating trends and the deal pipeline remain unperturbed. This assessment aligns with InvestingPro’s analysis, which awards the company a "GOOD" Financial Health score, supported by strong revenue growth of 13.65% over the last twelve months.
Since the end of the first quarter of 2025, Agree Realty has taken steps to further strengthen its capital position, with sufficient liquidity to support deal flow beyond year-end. The company’s balance sheet features sector-low leverage and no debt maturities until mid-2027. InvestingPro data confirms this strong liquidity position, showing that current assets exceed short-term obligations with a current ratio of 1.17.
JMP views Agree Realty’s cash flows as highly durable, supported by an eight-year average lease term and almost 70% investment grade exposure. The firm notes these factors contribute to the company’s financial stability.
Shares of Agree Realty currently trade at 17x 2025 estimated AFFO per share, representing a 3.5-turn multiple premium to net-lease REITs. JMP believes this premium adequately reflects the high-quality portfolio, leverage position, and earnings growth prospects, suggesting the stock is fairly valued.
In other recent news, Agree Realty Corporation has announced the pricing of a $400 million public offering of 5.600% senior unsecured notes due in 2035. The notes, priced at 99.297% of the principal amount, are expected to yield an effective maturity rate of 5.692%. The funds raised are intended for general corporate purposes, including debt reduction and property acquisitions. This financial move is part of Agree Realty’s strategy to enhance its liquidity to approximately $2.6 billion, as noted by CFO Peter Coughenour. Stifel analysts have maintained their Buy rating with a price target of $82.50, highlighting the strategic nature of this financial maneuver. Conversely, BTIG analysts downgraded the stock from Buy to Neutral, citing a significant premium in its valuation compared to peers. Meanwhile, JMP analysts have maintained a Market Perform rating, acknowledging the company’s strong liquidity and growth profile. These developments reflect Agree Realty’s ongoing efforts to manage its financial structure and investment strategies effectively.
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