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Investing.com - Lucid Capital Markets initiated coverage on Millrose Properties (NYSE:MRP) with a Buy rating and a $40.00 price target on Monday. The target represents a 16% upside from the current price of $34.35, with the stock already showing impressive momentum, gaining over 62% year-to-date.
The real estate investment trust (REIT), which was established as a spin-off from Lennar Corporation (NYSE:LEN) in the first quarter of 2025, operates as a land bank offering an approximately 8% dividend yield. According to InvestingPro data, the company maintains strong financial health with a current ratio of 67.01 and operates with moderate debt levels. Additional insights and 12 more ProTips are available for subscribers.
As of the second quarter of 2025, Millrose Properties’ portfolio includes nearly 129,000 homesites across 1,000 potential single-family residential communities in 29 states.
Lucid Capital Markets notes that growth among third-party homebuilding clients has been robust, with management anticipating distributing approximately 100% of adjusted funds from operations (AFFO).
The $40 price target represents 13 times 2026 estimated AFFO, in line with Millrose’s current trading multiple on 2025 estimated AFFO and the homebuilding sector’s valuation of 13 times 2025 estimated earnings per share.
In other recent news, Millrose Properties Inc. reported its second-quarter 2025 earnings, surpassing market expectations. The company achieved an earnings per share (EPS) of $0.68, slightly below the forecasted $0.69, but exceeded revenue expectations with $149 million compared to the anticipated $145.45 million. Additionally, Millrose Properties announced it has priced a private offering of $750 million in senior notes, an increase from the initially planned $500 million. The 6.25% Senior Notes, due 2032, were priced at 100% of the principal amount and are expected to close in September 2025, pending customary conditions. Initially, the company had planned to offer $500 million in senior notes, intending to use the proceeds along with cash on hand to repay a $500 million term loan due in 2026. These recent developments highlight significant financial maneuvers by Millrose Properties, reflecting strategic adjustments in their debt management.
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