Analyst John Kim of BMO Capital maintained a Buy rating on Eastgroup Properties (EGP – Research Report), reducing the price target to $186.00.
John Kim has given his Buy rating due to a combination of factors that highlight Eastgroup Properties’ strong performance and growth potential. The company started the year robustly, surpassing expectations with its first-quarter FFO per share, driven by increased occupancy and accelerating same-store net operating income. Eastgroup’s focus on small-bay properties, especially in Florida and Arizona, has resulted in impressive cash leasing spreads, significantly outperforming the overall portfolio.
Despite some challenges, such as declining leasing spreads in Southern California and slower development starts, the positives outweigh the negatives. The company’s leasing activity remained strong, with a notable increase in signed square footage. Additionally, occupancy rates improved, and development yields saw an uptick. Eastgroup’s financial health is solid, with a strengthened balance sheet and a favorable debt-to-adjusted EBITDA ratio, further supporting the Buy rating.
In another report released on April 14, Truist Financial also upgraded the stock to a Buy with a $180.00 price target.