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On Wednesday, Desjardins analysts began coverage of Plaza Retail REIT (PLZ-U:CN) (OTC: PAZRF) stock, issuing a Buy rating and setting a price target of C$4.25. The analysts forecast an approximate 4.5% growth in funds from operations per unit (FFOPU) through 2026. They predict this increase will stem from a favorable demand-supply imbalance in the market, which is expected to enhance the company's top-line growth.
The analysts highlighted the potential benefits of Plaza Retail REIT's development and capital recycling programs, which they believe will further support the REIT's financial performance. According to Desjardins, these strategic initiatives are well-positioned to capitalize on the current market dynamics.
Plaza Retail REIT's attractive distribution yield of 7.9% was also noted as a significant factor in the analysts' positive outlook. This yield, coupled with the REIT's current valuation discount, was cited as a reason for the unit price being seen as a compelling entry point for investors.
The analysts' coverage initiation reflects their confidence in Plaza Retail REIT's ability to grow and generate returns for unit holders. They emphasized the REIT's solid position to benefit from the identified market trends and its strong development strategies.
Desjardins' Buy rating and C$4.25 price target suggest that they see a favorable risk-reward scenario for Plaza Retail REIT at its current market price. The analysts' comments indicate a positive view of the company's future financial prospects and its capacity to perform well in the coming years.
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