Jericho, New York-based Kimco Realty Corporation (KIM) is a real estate investment trust and leading owner and operator of high-quality, open-air, grocery-anchored shopping centers and mixed-use properties. Valued at a market cap of $13.9 billion, the company’s portfolio is strategically concentrated in the first-ring suburbs of the top major metropolitan markets.
This retail REIT has lagged behind the broader market over the past 52 weeks. Shares of KIM have declined 7.6% over this time frame, while the broader S&P 500 Index ($SPX) has gained 15.4%. However, on a YTD basis, the stock is up 2.2%, outpacing SPX’s 1.8% return.
Narrowing the focus, KIM has underperformed the State Street Real Estate Select Sector SPDR ETF (XLRE), which surged 1% over the past 52 weeks and 2.5% on a YTD basis.
On Oct. 30, shares of KIM plunged 1.9% despite posting better-than-expected Q3 earnings results. Due to growth in revenue from rental properties, the company’s total revenue increased 5.6% year-over-year to $535.9 million, surpassing consensus estimates by 2.2%. Moreover, its FFO of $0.44 per share grew 2.3% from the same period last year and topped analyst expectations. However, its bottom-line growth was partially offset by a $13.6 million rise in depreciation and amortization and an $8 million increase in interest expense, which might have weighed on investor sentiment.
For the current fiscal year, ending in December, analysts expect KIM’s FFO to grow 6.7% year over year to $1.76 per share. The company’s FFO surprise history is promising. It met or topped the consensus estimates in each of the last four quarters.
Among the 25 analysts covering the stock, the consensus rating is a "Moderate Buy,” which is based on nine “Strong Buy” and 16 “Hold” ratings.
The configuration is more bullish than it was two months ago, with eight analysts suggesting a "Strong Buy” rating.
On Jan. 20, Truist Financial Corporation (TFC) analyst Ki Bin Kim maintained a "Hold" rating on KIM, but lowered its price target to $22, indicating a 6.2% potential upside from the current price levels.
The mean price target of $23.70 represents a 14.4% premium from KIM’s current price levels, while the Street-high price target of $27 suggests a 30.4% potential upside from the current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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