Phillips Edison stock initiated with Equalweight rating by Barclays

Investing.com - Phillips Edison & Co. (NASDAQ:PECO) received an Equalweight rating initiation from Barclays (LON:BARC) on Wednesday, with the firm setting a price target of $37.00.

Barclays highlighted PECO’s position as a "lower-beta, ultra-defensive shopping center REIT" with a portfolio that is "nearly exclusively grocery-anchored" and has its largest regional presence in the Sunbelt. InvestingPro data shows the company maintains a healthy 3.5% dividend yield and has raised its dividend for 5 consecutive years, with a strong current ratio of 1.36x indicating solid financial health.

The research firm noted that despite having "de-rated somewhat against the peer set in the last two years following its post-IPO highs," PECO continues to trade at a "modest FFO premium (~1x)" compared to its peers.

Barclays observed that the company has "re-deployed most of its internally-generated cash flow into acquisitions in an effort to grow and diversify," while suggesting that "incremental returns on M&A are less than they were two or three years ago, given significant cap rate compression in grocery-anchored centers."

The firm concluded that Phillips Edison’s shares are "fairly valued at current levels," supporting its Equalweight rating and $37.00 price target.

In other recent news, Phillips Edison & Company reported impressive financial results for the first quarter of 2025. The company’s earnings per share reached $0.21, surpassing the projected $0.14, while revenue hit $178.31 million, exceeding the expected $165.14 million. Despite these strong financial outcomes, the company affirmed its full-year guidance for NAREIT FFO growth of 5.7%, indicating confidence in its ongoing performance. Additionally, Phillips Edison priced a $350 million public offering of 5.250% senior unsecured notes due in 2032, with the proceeds intended for general corporate purposes, including debt repayment and property acquisitions.

The company continues to maintain high occupancy rates, with portfolio occupancy reaching 97.1%, reflecting strong demand in its retail centers. The notes offering was managed by a consortium of financial institutions, including J.P. Morgan and Morgan Stanley (NYSE:MS). Despite a slight decline in after-hours trading, the company remains optimistic about its acquisition plans, targeting $350-$450 million in acquisitions this year. The management has expressed confidence in the resilience of its cash flows and the strategic advantage of having top grocers as tenants.

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