Barclays upgrades W. P. Carey stock rating on valuation appeal
Barclays has raised its rating on W. P. Carey stock, moving it from Underweight to Equalweight on Friday. The firm set a price target of $80.00 for the stock. Barclays' decision is based mainly on W. P. Carey's valuation compared to other REITs in their coverage, not just limited to Net Lease properties. The company stands out with 49% of its same-store rent protected by CPI-linked escalators, which is very high compared to other companies in the same sector and should help safeguard earnings during the current high inflation period.
W. P. Carey's valuation metrics, such as its PEG ratio, are attractive when compared to its peers, with a 0.27 ratio that is particularly appealing in the current market. The stock is also trading at a low P/E ratio of 24.19 relative to expected earnings growth. Barclays noted that the company's portfolio is in better shape from both a composition and credit standpoint compared to two years ago.
Since the end of 2024, W. P. Carey has sold about $1.5 billion in assets and acquired roughly $2.9 billion in properties. The company maintains a solid credit profile, with no major issues from a handful of previous problem tenants. W. P. Carey's financial health is also reflected in its current ratio of 1.16 and a high dividend yield of 5.35%.
The real estate investment trust reported better-than-expected earnings in its latest quarter, with adjusted earnings per share of $0.82 surpassing forecasts of $0.67, and revenue of $459.67 million exceeding expectations of $454.23 million. As a result of improved investment activity and rent growth, W. P. Carey has raised its full-year AFFO guidance to between $5.19 and $5.27 per share, with projected investment volume between $1.7 billion and $2.1 billion.
The company's occupancy rate improved to 98.5%, and same-store rent growth was recorded at 2.6%. Notably, the company completed a $400 million sale-leaseback with GardenCore and raised its quarterly dividend by 4.4% to $0.94 per share.
Written by urgent.news from Investing.com's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
