Canaccord Genuity analyst Mark Rothschild maintained a Buy rating on Automotive Properties (APR.UN – Research Report) yesterday and set a price target of C$13.00.
Mark Rothschild’s rating is based on several key factors that suggest a positive outlook for Automotive Properties. The REIT has demonstrated steady internal growth, with same-property net operating income increasing by 2.0% due to contractual rent hikes. This growth is expected to continue, driven by higher rental rates and strategic acquisitions, such as the recent purchase of a Tesla collision center in Ohio and a Rivian dealership in Tampa, which are anticipated to enhance cash flow.
Despite a slight decline in funds from operations per unit in 2024, the forecast for 2025 and 2026 shows promising growth, with expected increases of 5.5% and 3.3%, respectively. The REIT’s valuation remains attractive, trading at a lower multiple compared to its peers, and its portfolio is fully occupied, ensuring stable revenue. These factors, combined with a target price aligned with the net asset value estimate, underpin Rothschild’s Buy rating for Automotive Properties.
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