Analysts rate RioCan Real Estate Investment Trust with a Strong Buy rating and a $25 target

by: Gillian Lawrence
RioCan Real Estate Investment Trust

Analysts rate RioCan Real Estate Investment Trust with a consensus Strong Buy rating and a 12-month average target price of $25.23 per share.

Based on the RioCan Real Estate Investment Trust stock forecasts from 7 analysts, the average analyst target price for RioCan Real Estate Investment Trust is CAD 25.23 over the next 12 months. RioCan Real Estate Investment Trust’s average analyst rating is Strong Buy. Stock Target Advisor’s own stock analysis of RioCan Real Estate Investment Trust is Slightly Bearish, which is based on 6 positive signals and 10 negative signals. At the last closing, RioCan Real Estate Investment Trust’s stock price was CAD 21.30RioCan Real Estate Investment Trust’s stock price has changed by -0.19% over the past week, +9.85% over the past month and -2.74% over the last year.

About RioCan Real Estate Investment Trust (REI-UN:CA:TSX)

RioCan is one of Canada’s largest real estate investment trusts. RioCan owns, manages and develops retail-focused, increasingly mixed-use properties located in prime, high-density transit-oriented areas where Canadians want to shop, live and work. As at September 30, 2020, our portfolio is comprised of 221 properties with an aggregate net leasable area of approximately 38.4 million square feet (at RioCan’s interest) including office, residential rental and 16 development properties.

 

Most Recent Analyst Ratings for RioCan Inc:

News:

RioCan Real Estate Investment Trust (TSE:REI.UN) shareholders have seen the stock price gain over   11% in the last month, after 3 years of poor return on their investment. The stock is down 19% over the course of the last 3 years, obviously underperforming the market by a large margin.

RioCan Real Estate Investment Trust last week announced their quarterly results, and President John Gitlin responded in kind with this statement:

“Our strong results for the quarter reflect our capacity to generate quality income and growth in any environment, focused on our strategy to drive growth and create value over the long-term, we will continuously evolve our portfolio to meet ever-changing market demands with more essential and resilient tenants. The quality and positioning of our portfolio combined with our balance sheet strength will continue to drive performance. As we enter into the second half of the year, we remain confident in our growth trajectory and the ongoing demand for the quality real estate that defines RioCan.”

RioCan Results:

 

Three months ended June 30 Six months ended June 30
(in millions, except where otherwise noted, and per unit values) 2022 2021 2022 2021
Financial Highlights
Net income $         78.5 $         145.3 $         238.5 $         252.0
Weighted average Units outstanding – diluted (in thousands)         308,537         317,882         309,324         317,771
FFO 1 $         131.7 $         127.5 $         262.2 $         233.6
FFO per unit – diluted 1 $         0.43 $         0.40 $         0.85 $         0.73

What we like:

High market capitalization

This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable.

Underpriced compared to book value

The stock is trading low compared to its peers on a price to book value basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Underpriced on cashflow basis

The stock is trading low compared to its peers on a price to cash flow basis and is in the top quartile. It may be underpriced but do check its financial performance to make sure there is no specific reason.

Low debt

The company is less leveraged than its peers ,, and is among the top quartile, which makes it more flexible. However, do check the news and look at its sector. Sometimes this is low because the company is not growing and has no growth potential.

Positive cash flow

The company had positive total cash flow in the most recent four quarters.

Positive free cash flow

The company had positive total free cash flow in the most recent four quarters.

What we don’t like:

Poor risk adjusted returns

This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution.

High volatility

The total returns for this company are volatile and above median for its sector over the past 5 years. Make sure you have the risk tolerance for investing in such stock.

Below median dividend returns

The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income.

Overpriced compared to earnings

The stock is trading high compared to its peers on a price to earning basis and is above the sector median.

Poor return on equity

The company management has delivered below median return on equity in the most recent 4 quarters compared to its peers.

Poor capital utilization

The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers.

Poor return on assets

The company management has delivered below median return on assets in the most recent 4 quarters compared to its peers.

Overpriced on free cash flow basis

The stock is trading high compared to its peers on a price to free cash flow basis. It is priced above the median for its sectors. Proceed with caution if you are considering to buy.

Low Earnings Growth

This stock has shown below median earnings growth in the previous 5 years compared to its sector.

Low Revenue Growth

This stock has shown below median revenue growth in the previous 5 years compared to its sector.

Disclaimer

Stock Target Advisor is not a broker/dealer, investment advisor, or platform for making stock buying or selling decisions. Our goal is to democratize and simplify financial information through automated analysis, aggregation of stock information, and education to help investors with their research. No content on our site, blogs or newsletters constitutes – or should be understood as constituting – a recommendation to enter into any securities transactions or to engage in any of the investment strategies presented in our site content. We also cannot guarantee the accuracy of any information presented on our site and in our analysis.

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