Realty Income (O) and National Retial Properties (NNN) upgrade details-- to Outperform at Baird based on valuation; acquisition spreads remain attractive
Baird is upgrading NNN, O to Outperform, reiterating $37 and $47 price targets, respectively. With shares for both National Retail and Realty Income having underperformed the RMZ by over 900 bps since May 21, they now view relative risk/reward as attractive amid a buyer-friendly acquisition environment, adding under-appreciated runway to each co's growth profile. In our view, investor expectations of imminent Fed tapering are largely prevalent, presenting a rare entry point for portfolios that continue to move up the quality curve.
21-Aug-13 05:47 ET CALLS
Early Research Calls
Upgrades: •National Retail Properties (NNN 31.33) upgraded to Outperform from Mkt Perform at FBR Capital; tgt $37. Firm notes their thesis has been that National Retail Properties is a high quality net-lease REIT with a long, successful operating history through various interest rate/economic cycles with a stellar management team to boot. With the recent move up in long-term interest rates and ensuing market agita, they believe valuation has now come back down to a level at which investors need to take a fresh look at the stock. They think it's important to consider co as an alternative means to play improving credit quality, which historically coexists with rising interest rates, and ties well into their theme of owning stocks that are positively correlated with credit reflation.