Street Calls of the Week
Investing.com - UBS initiated coverage on Urban Edge Properties (NYSE:UE) with a Neutral rating and a $21.00 price target on Friday. According to InvestingPro data, the REIT currently trades at $20.37, with analyst targets ranging from $21 to $26. The company maintains a "GOOD" overall financial health score, supported by strong liquidity and consistent profitability.
The real estate investment trust shows strong net operating income growth driven by leasing momentum, with one of the largest signed-not-open pipelines at 430 basis points compared to the peer average of 280 basis points, according to UBS.
The firm projects solid funds from operations (FFO) growth for Urban Edge, forecasting 6.0% growth in 2025 (matching consensus and above the peer average of 4.7%) and 4.2% growth in 2026 (below consensus of 5.3% and peer average of 6.3%).
Despite this growth outlook, UBS notes potential headwinds from Urban Edge’s elevated exposure to challenged tenants, particularly Kohl’s, which represents 300 basis points of annual base rent (ABR).
The firm points out that while Kohl’s rents at Urban Edge centers average $11.43 per square foot versus existing anchor rents of $23.51 per square foot (suggesting potential rent upside), the large average size of Kohl’s boxes (95,000 square feet) would likely require significant downtime, construction costs, and capital expenditure if new tenants were needed.
In other recent news, Urban Edge Properties reported its financial results for the second quarter of 2025, highlighting a significant increase in same property net operating income (NOI) and strong leasing performance. The company’s financial update underscores its positive operational momentum. While the stock price experienced a slight fluctuation, the focus remains on the company’s robust financial performance. These developments are part of Urban Edge Properties’ ongoing efforts to enhance its financial stability and operational efficiency. The company’s performance in the second quarter reflects its strategic initiatives and market positioning. Investors and analysts are likely to keep a close eye on the company’s future earnings reports to assess continued growth.
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