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Tuesday, Stifel analysts adjusted their outlook on Brixmor Property Group Inc. (NYSE:BRX), reducing the price target to $29.50 from the previous $31.25 while maintaining a Hold rating on the stock. The revision followed Brixmor’s first-quarter financial performance, which revealed funds from operations (FFO) of $0.56 per share, exceeding Stifel’s estimate by $0.02 and the consensus estimate by $0.01. The new target sits within the broader analyst range of $26 to $39, according to InvestingPro data, which also indicates the stock is currently trading at a relatively high P/E ratio of 24.7x.
The analysts noted that the positive variance in Brixmor’s reported earnings was attributable to higher net operating income (NOI) and lower selling, general, and administrative expenses (SG&A). In light of the recent earnings report, Stifel has updated its FFO estimates for Brixmor. For the year 2025, the firm now anticipates an FFO of $2.24, up from $2.22. However, for 2026, the estimate has been slightly reduced to $2.31 from $2.32. Additionally, Stifel introduced its 2027 FFO projection of $2.39.
The revised price target of $29.50, according to Stifel, is based on a capitalization rate (cap rate) of 6.75% applied to the company’s forward 12-month NOI. This financial metric is commonly used in the real estate industry to estimate the potential return on an investment property.
Brixmor Property Group, which specializes in the ownership and operation of shopping centers, has demonstrated a capacity to generate steady FFO, a key metric for real estate investment trusts (REITs), as it indicates the cash flow generated from their operations. The company’s recent financial results have shown resilience, slightly outpacing analysts’ expectations. InvestingPro data reveals the company maintains a healthy 75.3% gross profit margin and has consistently raised its dividend for four consecutive years, currently offering a 4.4% yield. With an overall Financial Health score rated as "GOOD" by InvestingPro, the company appears well-positioned despite its short-term obligations exceeding liquid assets.
In other recent news, Brixmor Property Group reported its fourth-quarter 2024 earnings, exceeding analyst expectations with an EPS of $0.27 compared to the forecast of $0.23. The company also reported revenue of $328.44 million, slightly above the anticipated $327.76 million. Jefferies analyst Linda Tsai upgraded Brixmor’s stock rating from Hold to Buy, raising the price target to $33.00 due to strong same-store net operating income guidance and a projected 6.1% funds from operations (FFO) growth for 2025. In contrast, Citi analysts adjusted their outlook by reducing the price target to $28.00 from $31.00, maintaining a Neutral rating due to concerns over tenant creditworthiness in the retail sector.
Brixmor’s robust performance was highlighted by its focus on grocery-anchored centers and tenant mix upgrades. The company reported a full-year FFO of $2.13 per share, a 5% increase from the previous year. Despite concerns about increased bad debt and Chapter 11 tenant exposure, Brixmor provided 2025 earnings guidance that exceeded expectations. The company projects a NAREIT FFO growth of 4% at the midpoint for 2025, with plans for continued focus on value-add acquisitions and redevelopments.
Brixmor’s liquidity remains strong, with a total of $1.6 billion, and the company plans to target $150-200 million in annual reinvestments. The company’s strategic initiatives have positioned it well in a competitive market, with an emphasis on high-traffic retail locations. Despite challenges, Brixmor’s recent developments suggest confidence in its financial health and future growth.
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