On Monday, Raymond (NS:RYMD) James updated its outlook on Regency Centers (NASDAQ: NASDAQ:REG), a real estate investment trust specializing in grocery-anchored shopping centers, by increasing the price target from $75.00 to $80.00. The firm maintained its Outperform rating on the stock.
The updated price target represents a continuity of confidence in the company's performance, with the analyst citing Regency Centers' development and redevelopment efforts as key drivers of long-term value. The company is noted to have one of the most robust pipelines in the sector, comparable to that of Federal Realty Investment Trust (NYSE:FRT).
Regency Centers' shares are currently valued at 21 times the firm's estimated adjusted funds from operations (AFFO) for the year 2024. The new price target is based on the same multiple applied to the projected 2025 AFFO. Raymond James believes that the current valuation is justified and that the premium is warranted due to the high quality of Regency Centers' portfolio and its strong financial position characterized by low leverage.
The analyst's comments highlighted the strategic positioning of Regency Centers' assets and the company's financial health. "REG has one of the best development/redevelopment pipelines across the space (along with FRT), which we believe will continue to drive longer-term value creation," the analyst remarked.
Furthermore, the analyst pointed out the alignment of the new price target with the company's existing trading multiple, indicating a stable outlook for the stock's valuation. "Our increased $80 price target (up from $75) implies REG shares trading at 21x 2025E AFFO, in line with the current multiple," the analyst explained. The continued Outperform rating suggests that Raymond James expects Regency Centers to outperform its peers or the broader market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.