Julien Blouin, an analyst from Goldman Sachs, has initiated a new Buy rating on Millrose Properties Inc Class A (MRP).
Julien Blouin has given his Buy rating due to a combination of factors that highlight the potential for strong returns from Millrose Properties Inc. The company, a real estate investment trust (REIT), is expected to deliver a total return of 21% over the next 12 months, driven by a 10% anticipated forward twelve-month dividend yield. This optimistic outlook is supported by MRP’s business model, which focuses on generating stable cash flows through option payments from homebuilders, allowing them to purchase home sites at pre-agreed prices.
Moreover, Blouin anticipates that MRP’s earnings and value will grow as it expands its land site acquisitions and option contracts with additional homebuilders. The forecasted average growth in earnings per share (EPS) and funds from operations (FFO) is 11% annually from 2025 to 2027. Despite currently trading at a significant discount to its book value, the expectation is that this gap will close as MRP consistently demonstrates its cash flow generation capabilities and effectively utilizes its leverage capacity for growth.