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Investing.com -- Real estate investors seeking opportunities in today’s market should take note of Mizuho’s latest sector analysis, which identifies two standout performers poised for strong growth in the coming years.
The research highlights companies with resilient business models, strategic market positioning, and solid fundamentals that could potentially outperform their peers in the current economic environment.
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First Industrial Realty Trust (FR)
First Industrial Realty Trust emerges as one of Mizuho’s two top picks in the real estate sector. The firm believes FR’s diversified tenant base and exposure to high-demand sub-markets remain underappreciated by investors.
Following a strong second quarter performance and promising outlook for fiscal year 2025, analysts see increased probability for FR to accelerate lease-up of its under-construction pipeline. The company’s robust balance sheet, minimal variable-rate debt, and ability to monetize non-core assets provide significant financial flexibility for pursuing accretive opportunities, including selective development and strategic acquisitions.
Mizuho has assigned a price target of $56, based on a 19x multiple applied to 2025 estimated FFO, citing stable same-store NOI growth potential of approximately 7.8% in FY25.
In recent news, First Industrial Realty Trust announced third-quarter 2025 earnings that surpassed analyst expectations for EPS, though revenue came in slightly below forecasts.
Mizuho’s second top REIT pick is Brixmor Property Group. The firm highlights BRX’s defensive tenant mix, strong signed-not-occupied pipeline, and sector-leading leasing spreads as key factors that should drive above-average FFO growth in 2025 and 2026.
Upcoming catalysts include rental income from signed leases coming online (majority expected by year-end 2025) and continued leasing demand in a limited supply environment.
While BRX has elevated exposure to watchlist tenants, Mizuho notes the company has a higher "cushion" in its guidance range, and tenant bankruptcies may actually offer opportunities to re-lease space at higher rents with more productive tenants.
The firm has set a base case price target of $30 for BRX, with a bull case of $37 and a bear case of $22.
Brixmor Property Group reported third-quarter 2025 results that beat estimates for both earnings per share and revenue. Additionally, KeyBanc reiterated its Overweight rating on the company.
Both companies face potential challenges, including economic uncertainty, interest rate fluctuations, and tenant credit issues.
For FR specifically, slower lease-up of development properties could impact future earnings, while BRX investors should monitor retailer expansion plans in a potentially recessionary environment.
However, Mizuho’s analysis suggests these two real estate investment opportunities are well-positioned to navigate current market conditions and deliver value to shareholders through disciplined capital allocation and favorable positioning within their respective sub-sectors.
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