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Granite Real Estate (TSE:GRT.UN)
TSX:GRT.UN
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Granite Real Estate
(TSX:GRT.UN)
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Rating:73Outperform
Price Target:
C$85.00
▲(1.49% Upside)
Granite Real Estate's strong financial performance and positive earnings call sentiment are the primary drivers of its score. While technical indicators suggest caution, the company's solid valuation and attractive dividend yield provide a balanced investment opportunity.
Positive Factors
Revenue Growth
Consistent revenue growth reflects Granite's ability to capitalize on the demand in the logistics sector, ensuring stable cash flows and supporting long-term expansion.
Strong Balance Sheet
A strong balance sheet with significant asset value and liquidity provides financial stability, enabling strategic investments and resilience against market fluctuations.
Robust Leasing Activity
High leasing activity indicates strong demand for Granite's properties, supporting occupancy rates and rental income, which are crucial for sustained growth.
Negative Factors
Increased G&A Expenses
Rising G&A expenses can pressure profitability, potentially impacting cash flow and limiting funds available for reinvestment or distribution.
Higher Capital Expenditures
Increased capital expenditures may strain cash flow and reduce free cash available for other strategic initiatives, affecting financial flexibility.
Challenges in Greater Toronto Area
Declining rents in a key market like the Greater Toronto Area could signal weakening demand, potentially impacting revenue and growth prospects.
Granite Real Estate (GRT.UN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$5.07B
Dividend Yield4.18%
Average Volume (3M)85.21K
Price to Earnings (P/E)18.2
Beta (1Y)0.85
Revenue Growth9.81%
EPS Growth-3.42%
CountryCA
Employees70
SectorReal Estate
Sector Strength53
IndustryREIT - Industrial
Share Statistics
EPS (TTM)1.12
Shares Outstanding60,590,990
10 Day Avg. Volume73,610
30 Day Avg. Volume85,207
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)0.76
Price to Sales (P/S)7.69
P/FCF Ratio12.93
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$88.75Price Target Upside5.97% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Granite Real Estate Business Overview & Revenue Model
Company DescriptionGranite 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 MoneyGranite Real Estate generates revenue primarily through leasing its industrial properties to tenants under long-term lease agreements. The company's revenue model is centered around rental income, which is derived from both fixed and variable lease components. Key revenue streams include base rent, as well as additional income from property management services and recoveries of property operating expenses. Granite benefits from strong demand in the logistics and e-commerce sectors, which drives occupancy rates and rental growth. The company may also engage in strategic partnerships with logistics firms and developers to enhance its property portfolio and increase its market presence. Overall, Granite's earnings are bolstered by its diversified tenant base and long-term lease agreements, providing stability and predictability in cash flows.
Granite Real Estate Earnings Call Summary
Earnings Call Date:Nov 05, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 25, 2026
Earnings Call Sentiment Positive
The earnings call highlighted Granite REIT's strong financial performance and leasing activity, with positive market conditions and increased distribution. However, the call also noted higher G&A expenses and capital expenditures, and challenges in the Greater Toronto Area. Overall, the highlights significantly outweigh the lowlights, indicating a positive sentiment.Q3-2025 Updates
Positive Updates
Strong Financial Performance and Guidance Increase
Granite REIT posted Q3 2025 results ahead of Q2 and in line with management's annual forecast. FFO per unit in Q3 was $1.48, a 6.5% increase from Q2 '25, and a 9.6% increase relative to the same quarter in the prior year. Guidance for 2025 was increased, reflecting strong leasing activity and NOI growth.
Robust Leasing Activity
Over 400,000 square feet of new leases were executed in the quarter, and 6 leases were extended, totaling over 2.3 million square feet. The renewal increase was strong at 88% for Q3 expiries in key markets.
Positive Market Conditions
8 of 16 markets in North America reported flat or declining market vacancy from the second quarter, with all portfolio markets reporting positive net absorption. Markets like Houston and Nashville saw significant rent increases.
Strong Balance Sheet and Liquidity
Granite's balance sheet remains strong with investment properties totaling $9.1 billion. The trust's liquidity is approximately $1 billion, with significant cash on hand and an undrawn operating line.
Increased Distribution
Granite announced a $0.15 distribution increase, marking the 15th consecutive annual increase since its inception in 2011, supported by strong cash flow growth and a conservative capital structure.
Negative Updates
Increased G&A Expenses
G&A expenses for the quarter were $14.1 million, $4.1 million higher than in Q2, primarily due to an unfavorable fair value adjustment to noncash compensation liabilities.
Higher Capital Expenditures
AFFO-related capital expenditures in Q3 totaled $10.5 million, an increase of $2.5 million over Q2, and $5.3 million higher than the same quarter last year.
Interest Expense Increase
Interest expense was slightly higher in Q3 2025 relative to Q2 by $0.5 million, primarily driven by draws on the credit facility to fund the Florida acquisitions.
Challenges in Greater Toronto Area
The Greater Toronto Area reported a year-over-year decline in asking rents by 5.5%, making it the weakest market in terms of rent growth.
Company Guidance
In the third quarter of 2025, Granite REIT reported strong financial performance, with a notable increase in FFO per unit to $1.48, marking a $0.09 (6.5%) rise from the previous quarter and a $0.13 (9.6%) increase from the same period last year. This growth was primarily driven by robust NOI growth, which accounted for $0.06 of the $0.09 FFO increase, supported by an impressive 88% leasing spread and the lease-up of previously vacant units in Canada and the U.S. Additionally, AFFO per unit rose to $1.26, up $0.03 from Q2 and $0.04 year-over-year, largely due to the FFO growth and lower leasing costs. Granite has raised its full-year guidance for 2025, projecting FFO per unit to range between $5.83 and $5.90, reflecting a 7% to 9% increase over 2024. The company’s balance sheet remains strong, with investment properties valued at $9.1 billion and a net leverage ratio of 35%. Furthermore, Granite’s liquidity stands at approximately $1 billion, and the company expects to reduce its credit facility balance with free cash flow from operations and property dispositions.Granite Real Estate Financial Statement Overview
Summary
Granite Real Estate exhibits strong financial performance with consistent revenue growth and robust profitability margins. The balance sheet is stable with a moderate debt-to-equity ratio, though there is room for improvement in return metrics. Cash flow generation remains efficient despite a recent decline in free cash flow growth.Income Statement
Granite Real Estate has demonstrated consistent revenue growth with a TTM growth rate of 1.54%, indicating a stable upward trajectory. The company maintains strong profitability margins, with a gross profit margin of 82.47% and a net profit margin of 56.27% in the TTM period. However, the net profit margin has decreased from the previous year, suggesting some pressure on net income. Overall, the income statement reflects a robust financial performance with room for improvement in net profitability.Balance Sheet
The balance sheet shows a moderate debt-to-equity ratio of 0.60, indicating a balanced leverage position. The return on equity (ROE) is relatively low at 6.01% in the TTM period, suggesting limited efficiency in generating profits from equity. The equity ratio stands at 56.95%, reflecting a strong equity base relative to total assets. While the company maintains a stable financial structure, there is potential to enhance profitability and return metrics.Cash Flow
Granite Real Estate's cash flow statement reveals a slight decline in free cash flow growth by -1.09% in the TTM period, indicating some challenges in cash generation. The operating cash flow to net income ratio is strong at 2.41, suggesting efficient cash conversion. The free cash flow to net income ratio is nearly 1, reflecting effective cash management. Despite the decline in free cash flow growth, the company maintains solid cash flow metrics overall.| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 604.98M | 569.14M | 521.25M | 455.58M | 393.49M | 340.20M |
| Gross Profit | 497.34M | 471.99M | 435.24M | 380.36M | 332.68M | 293.04M |
| EBITDA | 388.41M | 480.48M | 203.14M | 346.73M | 293.51M | 260.98M |
| Net Income | 290.62M | 360.61M | 136.66M | 155.77M | 1.31B | 429.80M |
Balance Sheet | ||||||
| Total Assets | 9.63B | 9.62B | 9.07B | 9.28B | 8.57B | 6.75B |
| Cash, Cash Equivalents and Short-Term Investments | 127.93M | 126.17M | 116.13M | 135.08M | 402.51M | 831.28M |
| Total Debt | 3.34B | 3.11B | 3.10B | 3.07B | 2.46B | 2.21B |
| Total Liabilities | 4.12B | 3.88B | 3.78B | 3.80B | 3.25B | 2.83B |
| Stockholders Equity | 5.51B | 5.73B | 5.28B | 5.48B | 5.32B | 3.92B |
Cash Flow | ||||||
| Free Cash Flow | 374.81M | 338.48M | 312.90M | 276.69M | 261.68M | 179.03M |
| Operating Cash Flow | 374.94M | 338.61M | 313.18M | 277.50M | 262.26M | 244.32M |
| Investing Cash Flow | -92.25M | -65.46M | -128.13M | -766.56M | -1.03B | -1.07B |
| Financing Cash Flow | -291.21M | -267.50M | -203.11M | 214.56M | 333.48M | 1.36B |
Granite Real Estate Technical Analysis
Positive
83.75
Price Trends
78.30
Positive
77.86
Positive
72.28
Positive
Market Momentum
1.60
Negative
75.22
Negative
81.31
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:GRT.UN, the sentiment is Positive. The current price of 83.75 is above the 20-day moving average (MA) of 80.66, above the 50-day MA of 78.30, and above the 200-day MA of 72.28, indicating a bullish trend. The MACD of 1.60 indicates Negative momentum. The RSI at 75.22 is Negative, neither overbought nor oversold. The STOCH value of 81.31 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:GRT.UN.
Granite Real Estate Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | C$4.00B | 8.68 | 11.49% | 5.74% | 4.11% | 35.99% | |
73 Outperform | C$5.07B | 18.24 | 5.31% | 4.18% | 9.81% | -3.42% | |
72 Outperform | C$3.76B | 15.32 | 5.27% | 5.56% | 7.31% | 74.70% | |
70 Outperform | C$2.93B | 1,057.33 | 0.14% | 5.82% | 6.32% | ― | |
68 Neutral | C$4.56B | 18.25 | 5.03% | 7.22% | 0.48% | 96.32% | |
68 Neutral | C$4.07B | 16.71 | 6.18% | 4.71% | -0.83% | -28.93% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% |
* Real Estate Sector Average
TSE:GRT.UN
Granite Real Estate
83.75
18.35
28.05%
TSE:CRR.UN
Crombie Real Estate ate
15.68
3.23
25.94%
TSE:CRT.UN
CT Real Estate Investment
16.70
3.22
23.89%
TSE:DIR.UN
Dream Industrl REIT
13.05
2.07
18.85%
TSE:FCR.UN
First Capital Realty
19.14
3.10
19.33%
TSE:SRU.UN
SmartCentres Real Estate Investment Trust
26.50
3.65
15.97%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.