Analyst Mark Rothschild from Canaccord Genuity maintained a Hold rating on RioCan Real Estate Investment and keeping the price target at C$19.50.
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Mark Rothschild has given his Hold rating due to a combination of factors that reflect both the strengths and challenges faced by RioCan Real Estate Investment. The company has demonstrated strong retail fundamentals, with high occupancy rates and significant leasing spreads in Canada’s major markets, which management expects to continue driving cash flow growth through same-property NOI. However, the financial forecast is tempered by the impact of the HBC bankruptcy and the need to refinance debt at higher interest rates, which has affected FFO growth.
Despite these challenges, RioCan’s valuation presents a mixed picture. The units are trading at an implied cap rate of 6.4%, which is a slight discount to the firm’s NAV estimate but still at a premium compared to its Canadian retail peers. On a cash flow multiple basis, the units are trading below the average of their peers, suggesting limited upside potential. Consequently, Rothschild maintains a Hold rating with a target price aligned with the NAV estimate, reflecting a cautious stance given the current market conditions.
In another report released on November 12, Scotiabank also maintained a Hold rating on the stock with a C$20.50 price target.
Based on the recent corporate insider activity of 25 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 RIOCF in relation to earlier this year.