Denison Mines announces $250 million convertible notes offering
Citi has reiterated its Neutral rating on Kimco Realty Corporation (NYSE: NYSE:KIM) while maintaining the price target at $24.00.
The reiteration came after Kimco announced the acquisition of Waterford Lakes Town Center in Orlando, Florida, on Monday. The purchase price of the shopping center, which is 976,000 square feet in size, was $322 million.
This transaction included the assumption of a $164 million mortgage with a fixed interest rate of 4.86% until May 2029.
The acquisition led Kimco to revise its guidance for acquisitions to a range of $565 million to $625 million, marking an increase of $270 million at the midpoint. The expected blended capitalization rate for these acquisitions is now set between 8.00% and 8.25%, up by 62.5 basis points. Concurrently, the company has lowered its dispositions guidance to a range of $250 million to $300 million, a decrease of $50 million.
Following the recent acquisition and a $500 million debt raise at a 4.85% interest rate, Citi has updated its forecast for Kimco's funds from operations (FFO) for the year 2025 to $1.73. This represents an increase of 3 cents or 1.8%. The transaction is viewed positively as it is expected to be accretive to adjusted funds from operations (AFFO) and FFO.
Citi has expressed interest in further details regarding potential opportunities for additional accretion within the center, which are anticipated to be discussed in the company's third-quarter earnings report.
In other recent news, Kimco Realty issued $500 million in notes due in 2035, a move aimed at reinforcing its financial standing. Furthermore, Kimco increased its unsecured term loan from $500 million to $550 million, earmarking the proceeds for general corporate purposes.
On the earnings front, Kimco reported an uptick in its second-quarter earnings, leading to an updated 2024 estimated funds from operations (FFO) from $1.59 to $1.61. This updated estimate has prompted several analysts to reassess their outlook on the company.
Citi, for instance, raised its price target for Kimco from $20.00 to $24.00, maintaining a Neutral rating. Mizuho, on the other hand, downgraded Kimco from Outperform to Neutral, while simultaneously increasing its price target to $23.00. Raymond James took a more bullish stance, upgrading Kimco's stock from Market Perform to Strong Buy and setting a new price target at $25.00.
InvestingPro Insights
Kimco Realty Corporation's recent acquisition of Waterford Lakes Town Center aligns with several positive indicators highlighted by InvestingPro. The company's market cap stands at $15.56 billion, reflecting its significant presence in the real estate sector. Kimco's revenue growth of 8.11% over the last twelve months and 12.96% in the most recent quarter suggests a robust expansion strategy, which is further reinforced by the Orlando acquisition.
InvestingPro Tips reveal that Kimco has maintained dividend payments for 33 consecutive years, demonstrating a commitment to shareholder returns. This is particularly relevant given the company's recent guidance revisions and the potential for increased funds from operations. Additionally, Kimco is trading near its 52-week high, with a strong return of 20.14% over the last three months, indicating investor confidence in the company's growth trajectory.
The current dividend yield of 4.16% may be attractive to income-focused investors, especially considering Kimco has raised its dividend for 3 consecutive years. While the P/E ratio of 43.94 suggests a premium valuation, it's worth noting that analysts predict the company will remain profitable this year, which could justify the higher multiple in light of its recent strategic moves.
For readers interested in a more comprehensive analysis, InvestingPro offers additional tips and insights that could provide further context to Kimco's financial position and future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.