Granite Real Estate (GRT.UN) AI Stock Analysis

• Market Cap: C$4.85B
• Dividend Yield: 4.18%
• Average Volume (3M): 85.21K
• Price to Earnings (P/E): 9.1
• Beta (1Y): 0.94
• Revenue Growth: 9.81%
• EPS Growth: -3.42%
• Country: CA
• Employees: 70
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Industrial
• EPS (TTM): 2.22
• Shares Outstanding: 60,600,624
• 10 Day Avg. Volume: 73,610
• 30 Day Avg. Volume: 85,207
• PEG Ratio: -6.95
• Price to Book (P/B): 0.91
• Price to Sales (P/S): 8.07
• P/FCF Ratio: 12.88
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$98.20
• Price Target Upside: 22.60% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 6.34
• Revenue Forecast (FY): C$655.95M

• Rating: 77 Outperform
• Price Target: C$91.00 ▲(13.61% Upside)
• Action: Reiterated Date: 03/04/26
• Date: Action: Reiterated 03/04/26

The score is led by solid financial performance (growth and improving cash generation) and a positive earnings update (raised guidance, strong leasing activity, and distribution growth). Technicals add support via an uptrend and positive momentum, while valuation is reasonable with a solid yield but not clearly cheap.

Positive Factors

Robust leasing and high renewal spreads

Sustained leasing velocity and an 88% renewal rate indicate durable demand for Granite's industrial/logistics portfolio. High renewal spreads and lease-up of vacant space translate into persistent NOI upside, improving cash flow predictability across lease terms.

Strong balance sheet and ample liquidity

A sizable asset base and roughly $1B of liquidity give Granite flexibility to fund selective development, acquisitions, or debt reduction. This conservative liquidity position supports capital allocation choices and resilience to cyclical REIT stress over the medium term.

Improving cash generation and raised FFO guidance

Rising FFO per unit and an upward revision to full-year guidance signal sustainably improving operating cash generation. Consistent FFO/AFFO growth enhances distribution coverage and funds reinvestment, supporting long-term income stability for unit holders.

Negative Factors

Rising leverage and higher debt

An upward drift in leverage reduces financial flexibility and increases exposure to rate cycles. Higher debt levels can raise interest costs and constrain acquisition or development activity if credit markets tighten, pressuring long-term cash available for distributions.

Volatile reported earnings quality

Significant year-to-year swings in margins and reported profits indicate reliance on one-time valuation gains and timing items. This variability complicates forecasting FFO and AFFO, undermining the reliability of reported earnings as a durable cash-generation gauge.

Rising operating costs, higher capex and regional softness

Growing G&A and AFFO-related capex raise fixed cost and maintenance burdens, reducing free cash flow durability. Coupled with localized rent weakness (GTA -5.5%) and modestly higher interest costs, these pressures can compress margins and slow distributable cash growth over several quarters.

Granite Real Estate Business Overview & Revenue Model

Company Description

Granite is a Canadian-based REIT engaged in the acquisition, development, ownership and management of logistics, warehouse and industrial properties in North America and Europe. Granite owns 108 investment properties representing approximately 45.3 million square feet of leasable area.

How the Company Makes Money

Granite Real Estate makes money primarily by earning rental revenue from leasing its industrial and logistics properties to tenants. Its core revenue stream is base rent under long-term leases, which may include contractual rent escalations (e.g., fixed step-ups or index-linked increases where applicable). In addition to base rent, the REIT can generate property-level income from tenant recoveries and reimbursements (often structured as additional rent) for certain operating costs such as property taxes, insurance, and common area maintenance, depending on lease type (e.g., net or semi-net lease structures). Granite may also earn income from development and expansion activity by investing capital to build or redevelop properties and then placing the completed space under lease, thereby increasing future rental cash flows; any gains from dispositions of properties can provide additional, non-recurring earnings when assets are sold above their carrying values. Like many REITs, Granite’s earnings capacity is influenced by occupancy levels, rental rate growth on renewals, the credit quality and concentration of its tenant base, the cost and availability of debt and equity financing used to fund acquisitions/development, and property operating expenses not recoverable from tenants. Specific significant partnerships: null.

Granite Real Estate Financial Statement Overview

Summary

Solid overall fundamentals with consistent revenue growth and strong reported profitability in the latest year, supported by steady and improving operating/free cash flow. Offsetting factors are volatility in reported earnings quality across years (likely influenced by REIT valuation/non-recurring items) and a recent uptick in leverage and debt levels.

Income Statement

Revenue has grown consistently from 2020 to 2025, with a notable step-up in 2025 (annual revenue growth of ~227%). Profitability is very strong on the latest annual report, with high gross and operating margins and a net margin above 50% in 2025. However, earnings quality looks volatile across years (e.g., unusually high net margins in 2020–2021 and a much lower net margin in 2022–2023), suggesting profits can be influenced by non-recurring items and valuation effects common in REIT reporting.

Balance Sheet

The balance sheet is sizable and relatively stable, with equity funding a meaningful portion of assets. Leverage is moderate for the sector, but has drifted up recently (debt-to-equity rising to ~0.61 in 2025 from ~0.54 in 2024), and total debt increased in 2025. Returns on equity are modest in most recent years (~6% in 2024–2025), well below the elevated 2020–2021 period, indicating less efficient profit generation despite a solid asset base.

Cash Flow

Cash generation is steady and improving, with operating cash flow and free cash flow rising in 2024 and again in 2025 (free cash flow growth ~3.4% in 2025). Free cash flow closely matches reported net income in recent years, which supports earnings conversion. The main watch-out is variability in how well operating cash flow covers net income (strong in 2024, much tighter in 2025 and weaker in some earlier years), implying periodic timing swings in working capital and cash receipts.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	618.70M	569.14M	521.25M	455.58M	393.49M
Gross Profit	507.07M	471.99M	435.24M	380.36M	332.68M
EBITDA	459.39M	480.48M	203.14M	346.73M	293.51M
Net Income	342.34M	360.61M	136.66M	155.77M	1.31B
Balance Sheet
Total Assets	9.73B	9.62B	9.07B	9.28B	8.57B
Cash, Cash Equivalents and Short-Term Investments	139.59M	126.17M	116.13M	135.08M	402.51M
Total Debt	3.34B	3.11B	3.10B	3.07B	2.46B
Total Liabilities	4.22B	3.88B	3.78B	3.80B	3.25B
Stockholders Equity	5.51B	5.73B	5.28B	5.48B	5.32B
Cash Flow
Free Cash Flow	387.55M	338.48M	312.90M	276.69M	261.68M
Operating Cash Flow	387.67M	338.61M	313.18M	277.50M	262.26M
Investing Cash Flow	-203.58M	-65.46M	-128.13M	-766.56M	-1.03B
Financing Cash Flow	-166.28M	-267.50M	-203.11M	214.56M	333.48M

Granite Real Estate Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 80.10
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GRT.UN, the sentiment is Negative. The current price of 80.1 is below the 20-day moving average (MA) of 87.21, below the 50-day MA of 87.34, and above the 200-day MA of 77.83, indicating a neutral trend. The MACD of -0.97 indicates Positive momentum. The RSI at 28.48 is Positive, neither overbought nor oversold. The STOCH value of 18.36 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:GRT.UN.

Granite Real Estate Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRT.UN	77 Outperform	C$4.85B	9.14	6.20%	4.18%	9.81%	-3.42%
CRR.UN	74 Outperform	C$2.92B	24.31	6.29%	5.82%	6.32%	―
CRT.UN	73 Outperform	C$3.89B	7.47	18.40%	5.74%	4.11%	35.99%
FCR.UN	73 Outperform	C$4.34B	3.77	25.30%	4.71%	-0.83%	-28.93%
SRU.UN	71 Outperform	C$4.52B	10.88	4.85%	7.22%	0.48%	96.32%
DIR.UN	69 Neutral	C$3.47B	21.64	5.27%	5.56%	7.31%	74.70%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%