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Evercore ISI shuffled up its rating recommendations on six real estate investment trusts on Monday as analyst Steve Sakwa pulled forward the timing of its valuation framework ahead of what will likely be the start of the Federal Reserve’s easing cycle this week.
In a note written to clients, Sakwa upgraded Simon Property Group (NYSE:SPG) to Outperform from In Line, EastGroup Properties (NYSE:EGP) to Outperform, SL Green Realty (NYSE:SLG) to In Line from Underperform, and Community Healthcare Trust (NYSE:CHCT) to In Line. He also downgraded Sun Communities (NYSE:SUI) to In Line from Outperform and Regency Centers (NASDAQ:REG) to In Line.
The analyst offers an explanation for each rating change:
- (SPG) – Sees above-average growth in same-store net operating income growth for 2025.
- (EGP) – Its “Sunbelt industrial exposure is less impacted by the oversupply issues in some of the bigger coastal markets along with better onshoring and near shoring trends in its key markets.” Also sees a compelling valuation as the stock has lagged peers this year.
- (SLG) – The REIT has “benefitted from an improved leasing environment in NYC as well as an improving debt market which should help its upcoming debt maturities and provide additional growth with the rollout of its new debt fund.”
- (CHCT) – The upgrade comes amid a sizable drop in shares following a “tough Q2 print.”
- (REG) – Shares have been outpacing peers over the last 90 days, limiting upside for the stock going forward.
- (SUI) – Shares have trounced residential peers by more than 1,100 basis points over the last 90 days, leaving the stock with limited upside potential.
