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On Monday, JMP Securities reaffirmed its positive stance on VICI Properties Inc. (NYSE: NYSE:VICI), maintaining a Market Outperform rating and a $35.00 price target. According to InvestingPro data, VICI boasts an impressive 5.84% dividend yield and has raised dividends for 7 consecutive years. The firm highlighted the real estate investment trust's strategic shift towards financing transactions rather than traditional acquisitions, a move seen as a response to the current volatile interest rate environment and consistent casino operator performance.
JMP Securities noted that the widening bid-ask spread has dampened acquisition activity, prompting VICI Properties to focus on addressing the funding needs of casino and lifestyle operators. This shift in strategy includes financing projects like the Great Wolf resorts and the Venetian property refresh. With an exceptional gross profit margin of 99.09% and a "Great" Financial Health Score from InvestingPro, the company appears well-positioned to execute this strategy.
The analyst also pointed out that VICI Properties is well-positioned for future growth, with several purchase rights embedded in its investments and potential expansion opportunities in New York and internationally. The company's proactive approach to growth, coupled with its solid lease income, positions it favorably in the market. InvestingPro analysis suggests the stock is currently undervalued, with 8 additional key insights available to subscribers.
VICI Properties' stock trades at 12.8 times forward Adjusted Funds From Operations (AFFO) per share, which is consistent with its peers in the net-lease real estate investment trust sector. Trading at an attractive P/E ratio of 10.98x, JMP Securities believes that VICI deserves a higher valuation due to its top-tier portfolio, transparent management, strong liquidity, and reliable cash flow.
The firm's continued endorsement of VICI Properties reflects confidence in the company's ability to leverage its strategic initiatives to foster accretive portfolio expansion and capitalize on future opportunities in the gaming and leisure sectors.
In other recent news, VICI Properties displayed a robust financial performance in its recent earnings call. The company announced an adjusted funds from operations (AFFO) per share increase of 4.9% to $0.57, and updated its full-year AFFO guidance to between $2.36 billion and $2.37 billion. In addition, VICI Properties reported approximately $2.9 billion in total liquidity, with $160 million in cash, and total debt standing at $17.1 billion.
In other developments, VICI Properties L.P., a subsidiary of VICI Properties, recently issued $750 million in senior unsecured notes with a 5.125% interest rate, maturing on November 15, 2031. The proceeds from this offering are earmarked to redeem VICI LP's existing 3.500% senior notes due February 15, 2025, with a total principal amount of $750 million.
Moreover, Barclays (LON:BARC) initiated coverage on VICI Properties with an Overweight rating, citing the company's quality assets and economic productivity as grounds for a higher valuation compared to its peers. Barclays analysts also noted that the company's valuation premium has historically been justified but has recently shifted to a slight discount, which they argue is unwarranted.
Lastly, VICI Properties is considering further investments in the youth sports sector and looking to expand its international footprint, notably in Canada. However, the management acknowledges unique risks associated with tribal gaming structures and industry volatility. These are some of the recent developments concerning VICI Properties.
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