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On Thursday, Stifel analysts reiterated their Buy rating and $82.50 price target for Agree Realty Corporation (NYSE:ADC), following the company’s announcement of a significant financial move. The company, which boasts a "GOOD" financial health score according to InvestingPro and has maintained dividend payments for 32 consecutive years, has successfully priced $400 million of 5.600% senior unsecured notes due in 2035. These notes were priced slightly below par at 99.297%, resulting in an effective yield to maturity (YTM) of approximately 5.692%.
The company’s management provided additional details in their release, stating that after accounting for the termination of the company’s forward starting swaps, the notes will have an all-in rate close to 5.35%. This financial strategy aims to optimize the company’s borrowing costs in the long term. With a current dividend yield of 4.24% and a strong current ratio of 1.17, InvestingPro analysis suggests the stock is trading near its Fair Value.
Agree Realty plans to allocate the proceeds from these notes towards various corporate endeavors. The funds are expected to be used for general corporate purposes, which includes fueling property acquisitions and development activities. Additionally, a portion of the proceeds may be directed towards the repayment or refinancing of certain existing debts.
The issuance of these senior unsecured notes is a strategic step for Agree Realty as it seeks to strengthen its financial position and support its growth initiatives. By securing long-term financing at a fixed rate, the company is positioning itself to manage future interest rate risks and fund its ongoing and prospective projects efficiently.
This financial maneuver is part of Agree Realty’s broader strategy to maintain a robust balance sheet and ensure adequate liquidity to fund its operations and strategic investments. With the reaffirmed Buy rating and price target from Stifel, Agree Realty’s stock continues to be viewed favorably by analysts in the investment community.
In other recent news, Agree Realty Corporation reported its first-quarter results for 2025, showing a mixed performance with earnings per share (EPS) slightly below expectations at $0.42, compared to the forecast of $0.43. However, the company exceeded revenue projections, reporting $169.16 million against an anticipated $164.17 million. Agree Realty has also raised its full-year adjusted funds from operations (AFFO) guidance, indicating confidence in its future growth. Additionally, the company announced the pricing of a $400 million public offering of 5.600% senior unsecured notes due 2035, aimed at enhancing liquidity and supporting its growth strategy.
Agree Realty has been active in the equity market, launching a public offering of 4.5 million shares as part of a forward sale agreement with Bank of America, N.A. The proceeds from this offering are intended for general corporate purposes, including acquisitions and debt repayment. Analyst activity around the company has been notable, with BTIG downgrading Agree Realty from Buy to Neutral, citing the company’s high valuation premium compared to its peers. Meanwhile, JMP Securities maintained a Market Perform rating, acknowledging the company’s solid liquidity and strategic financial moves.
The company’s financial flexibility was further highlighted by its recent commercial paper program and available credit, bringing its total liquidity to nearly $3 billion. Despite the positive financial position, analysts from both BTIG and JMP Securities noted that Agree Realty’s current stock valuation reflects its strengths, limiting potential for further multiple expansion. These recent developments underscore Agree Realty’s strategic efforts to bolster its financial standing and investment capacity in a volatile market environment.
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