RioCan: Solid Property Fundamentals Offset by Higher Interest Costs and Full Valuation Justify Hold Rating

Mark Rothschild, an analyst from Canaccord Genuity, maintained the Hold rating on RioCan Real Estate Investment. The associated price target was raised to C$20.00.

Mark Rothschild has given his Hold rating due to a combination of factors tied to RioCan’s mixed financial and operating outlook. While the trust is showing solid same-property NOI growth in its core commercial portfolio, this strength is being counterbalanced by higher interest costs that are pressuring core FFO per unit, which declined despite generally healthy property fundamentals.

At the same time, RioCan’s units trade at a modest premium to his updated NAV estimate and at valuation multiples that are only slightly below or in line with peers once non-recurring items are adjusted for, limiting upside from the current price. The continued softness in the small residential segment, along with ongoing asset sales there, also tempers the overall growth profile, leading Rothschild to see the current risk‑reward as fairly balanced rather than compelling enough for a Buy recommendation.

Based on the recent corporate insider activity of 22 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 RIOCF in relation to earlier this year.