Postal Realty’s Strategic Leasing and Cost Advantages Drive Buy Rating

Analyst Simon Yarmak of Stifel Nicolaus maintained a Buy rating on Postal Realty (PSTL – Research Report), boosting the price target to $18.25.

Simon Yarmak has given his Buy rating due to a combination of factors including Postal Realty’s strong internal lease growth and cost of capital advantages. The company’s strategic leasing approach has led to impressive same-store NOI guidance, driven by embedded lease escalations and favorable mark-to-market opportunities with USPS leases. This growth potential is further supported by the fact that a significant portion of rents are set to expire in the next few years, providing opportunities for renewal at potentially higher rates.
Additionally, Postal Realty’s cost of capital is favorable, with a nominal cost of equity around 8.2% and a cost of debt estimated at 5.9%. This advantageous cost structure, combined with a weighted average cost of capital (WACC) of approximately 7.4%, positions the company well for accretive acquisitions. Despite a recent CFO transition, the company’s financial and operational metrics remain strong, underpinning the Buy rating recommendation.

Based on the recent corporate insider activity of 14 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of PSTL in relation to earlier this year.