UBS initiates coverage on Kite Realty Group stock with Neutral rating

Investing.com - UBS initiated coverage on Kite Realty Group (NYSE:KRG), a $5.1 billion market cap real estate company with a GOOD financial health score according to InvestingPro, with a Neutral rating and a $24.00 price target on Tuesday.

The research firm cited near-term pressure from challenged tenants while acknowledging intermediate-term opportunities as the company transforms its portfolio mix.

UBS noted that Kite Realty is working to emphasize smaller Neighborhood/Community Centers and higher-quality Lifestyle Centers while reducing exposure to larger 250,000-600,000 square foot anchor-heavy Power Centers.

The firm believes this strategic shift will reduce KRG’s exposure to UBS watchlist tenants (currently at 1,045 basis points versus peer average of 600 basis points) that are more frequently found in Power Centers.

UBS projects Kite Realty’s 2025 same-store NOI growth at 1.9% compared to a peer average of 3.5%, and 2026 same-store NOI growth at 2.4% versus a peer average of 3.0%.

In other recent news, Kite Realty Group Trust reported strong financial results for the first quarter of 2025, with earnings per share (EPS) of $0.11, surpassing the forecast of $0.0739. Revenue also exceeded expectations, reaching $219.17 million compared to the anticipated $211.56 million. The company raised its full-year guidance by $0.02 per share, reflecting confidence in continued performance. Additionally, Kite Realty completed the acquisition of Legacy West, enhancing its portfolio with high-quality lifestyle and mixed-use assets. KeyBanc Capital Markets maintained its Overweight rating on Kite Realty, citing the acquisition as a significant growth opportunity. The firm also highlighted the potential expansion of Kite Realty’s relationship with GIC as a strategic advantage. Furthermore, Kite Realty announced the pricing of a $300 million offering of 5.200% Senior Notes due 2032, with plans to use the proceeds to repay outstanding debt and for general corporate purposes. These developments underscore Kite Realty’s strategic focus on growth and financial stability.

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