In a report released yesterday, Michael Markidis from BMO Capital maintained a Hold rating on Nexus Real Estate Investment (EFRTF – Research Report), with a price target of C$8.00.
Michael Markidis has given his Hold rating due to a combination of factors that reflect both positive developments and ongoing challenges for Nexus Real Estate Investment. The company’s Q4 results were in line with expectations, showing a slight increase in normalized funds from operations compared to estimates. Despite the setbacks from two unexpected tenant failures, Nexus anticipates mid single-digit same-property net operating income growth by 2025, driven by contractual rent increases and new leasing activities.
Capital recycling has positively impacted the balance sheet and portfolio composition, with significant dispositions improving leverage and increasing the industrial focus of the portfolio. However, the company’s above-average leverage and payout ratio compared to peers, along with concerns about certain legacy properties, contribute to a cautious outlook. The potential upside from development projects, while promising, is balanced by these risks, leading to a Hold recommendation.
In another report released yesterday, RBC Capital also maintained a Hold rating on the stock with a C$8.75 price target.
EFRTF’s price has also changed moderately for the past six months – from $6.400 to $4.738, which is a -25.97% drop .