Analyst Tom Callaghan from BMO Capital maintained a Buy rating on Flagship Communities REIT Investment Trust (MHCUF – Research Report) and decreased the price target to $19.50 from $20.00.
Tom Callaghan has given his Buy rating due to a combination of factors that highlight both growth and value in Flagship Communities REIT. The anticipated 6% increase in lot rents for 2025 contributes to an expected 11% year-over-year growth in funds from operations per unit (FFOPU), signaling robust financial performance. Additionally, the implied capitalization rate of 8.1% suggests that the stock is undervalued, providing a strong margin of safety for investors.
Flagship’s financial health is further supported by its attractive debt profile, having recently refinanced its debt at lower interest rates, which eliminates significant maturities until 2029. The REIT’s leverage is in a favorable position, with a debt-to-gross book value (D/GBV) ratio of 38.1%, offering flexibility for future acquisitions. Moreover, the company’s above-average organic growth potential, conservative capital structure, and strong insider ownership reinforce the positive outlook, despite potential conflicts and limited trading liquidity being adequately priced into the stock.
In another report released on March 12, Canaccord Genuity also maintained a Buy rating on the stock with a $19.00 price target.
Based on the recent corporate insider activity of 17 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of MHCUF in relation to earlier this year.
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