Stifel cuts Kimco stock price target to $25.75, maintains buy

Published 01/05/2025, 16:22
Stifel cuts Kimco stock price target to $25.75, maintains buy

On Thursday, Stifel analysts adjusted their outlook on Kimco Realty Corporation (NYSE:KIM), a real estate investment trust, by reducing its price target to $25.75 from $27.50. Despite this change, they sustained a Buy rating on the company’s shares. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, with particularly strong cash flow metrics. The stock currently appears overvalued based on InvestingPro’s Fair Value analysis.

The revision follows commentary from Kimco’s management during a recent call, where they expressed confidence in raising guidance despite the uncertainty faced by competitors. They highlighted that consumer traffic to stores remains robust, with a 6% year-over-year increase in April, and that the demand for leasing is solid. This is evidenced by the strong interest in spaces formerly occupied by Party City and Big Lots (NYSE:BIG). The company’s strong financial position is reflected in its impressive 34-year track record of maintaining dividend payments, currently yielding 5%, and its healthy current ratio of 3.17x.

Furthermore, Kimco boasts a substantial pipeline of leased but not yet open properties, which suggests potential for strong future cash flows. Management remains optimistic about the company’s prospects, stating that businesses with growth objectives are likely to continue their expansion plans to meet targets, thus sustaining strong demand for leases.

However, Kimco did acknowledge some market challenges, noting that the current volatility could affect leasing cycles. While some deals, including acquisitions and disposals, have been temporarily halted as stakeholders adopt a "wait-and-see" approach, the company believes that tenants with growth ambitions are not likely to halt their expansion efforts due to the difficulty in reaccelerating once market uncertainty subsides.

In other recent news, Estee Lauder Companies (NYSE:EL) reported a challenging third quarter of 2025, with earnings per share (EPS) dropping by 33% year-over-year and organic sales declining by 9%. Despite these results, the company is optimistic about its future, planning for a return to sales growth by fiscal 2026. Estee Lauder noted that its gross margin expanded by over 300 basis points, although its operating margin contracted to 11.4%. The company is focusing on key markets, including the U.S., China, and Japan, where it recorded market share gains. Estee Lauder is also addressing challenges in its Travel Retail segment, which saw a significant 28% organic decline. Analysts from Deutsche Bank (ETR:DBKGn) and Goldman Sachs have shown interest in Estee Lauder’s inventory management strategies and tariff mitigation plans. The company remains committed to strategic initiatives aimed at long-term growth, with a focus on improving gross margins and reducing operational costs.

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