Mizuho maintains Outperform on First Industrial Realty stock

Published 17/04/2025, 06:28
Mizuho maintains Outperform on First Industrial Realty stock

Thursday

Mizuho (NYSE:MFG) Securities has reaffirmed its Outperform rating and $53.00 price target on First Industrial Realty Trust (NYSE:FR) stock. The endorsement follows the company’s robust core first-quarter performance. Mizuho analysts pointed out that First Industrial Realty’s visibility on fiscal year 2025 funds from operations (FFO) and strong sub-market fundamentals justify their top pick position in the sector. They highlighted that the first-quarter rent spreads and same-store net operating income (SS-NOI) growth indicate potential upside to the company’s financial metrics. The company maintains strong fundamentals with a healthy 72.6% gross profit margin and has consistently raised dividends for 12 consecutive years, as noted in InvestingPro’s analysis, although macroeconomic factors could influence outcomes.

The analysts noted that the development lease-up is a significant catalyst for First Industrial Realty Trust, with management stating that the majority of this activity is expected in the second half of 2025. The company’s guidance for FFO remained unchanged at $2.87 to $2.97, with Mizuho and Street consensus at $2.89 and $2.91, respectively. With a solid financial health score rated as "GOOD" by InvestingPro and current liquidity exceeding short-term obligations, Mizuho analysts recommend purchasing the stock, maintaining their Outperform stance despite the possibility of an initial negative market reaction to the "headline miss" and the absence of development lease-up in the short term.

In other recent news, First Industrial Realty Trust reported mixed results for the first quarter of 2025. The company’s earnings per share were $0.36, slightly below the analyst consensus of $0.37, while revenue exceeded expectations at $177.07 million, compared to the estimated $176.51 million. This revenue figure marks a 9.1% increase year-over-year. The company also announced a substantial dividend increase of 20.3%, raising the quarterly dividend to $0.445 per share. First Industrial Realty Trust highlighted strong leasing activity, with cash rental rates on new and renewal leases rising by 41.7% in the first quarter. Additionally, the company acquired two fully leased buildings in Phoenix for $120 million and plans to commence two new development projects totaling 402,000 square feet in the second quarter. The company projects funds from operations for 2025 to be between $2.87 and $2.97 per share. These developments reflect First Industrial’s ongoing efforts in investment and capital market transactions.

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