National BankUnable to cut and paste the entire article so here's the link. CAR.UN was one of the picks.
https://www.adviceforinvestors.com/news/canadian-stocks/top-10-reits-for-a-recovery/ Top-10 REITS for a recovery
National Bank Financial analysts Matt Kornack and Tal Woolley say that if a sharp recovery emerges, these Top 10 REITS will materially outperform their class.
This report contains the result of our efforts to reset our forecasts, targets and ratings across the entirety of our coverage universe. This report also contains our first-quarter 2020 reporting season outlook. Put simply, first-quarter financials will not have nearly as much relevance as the individual outlooks each management team provides.
Liquidity needs look manageable across our public universe, especially since private markets have tended to employ higher leverage (making public players relatively safer credits in the industry). With the significant liquidity measures employed by central banks and CMHC (Canada Mortgage and Housing Corporation), we have heard from most management teams that lenders have been supportive when it comes to extending or refinancing debt.
For example, we have seen companies announce new credit facilities during mid March when the COVID-19 pandemic hurt the markets. For most of the REITs (Real Estate Investment Trusts) in our coverage universe, we see a viable path to meeting refinancing requirements, or having sufficient liquidity to bridge them for a period if credit tightens.
Liquidity is also coming from other non-traditional sources to help fund operational shortfalls. Beyond the traditional metrics of cash, undrawn credit and unencumbered asset pools, we are seeing some measures coming into place to help manage tenant difficulties. Various municipalities are allowing for 60-90 day deferrals on key REIT profit-and-loss expenses like property taxes.
Target prices reduced
We have made downward revisions across our entire universe, reducing target prices on average 19 per cent. This reduction is modestly understated, since some names reported in the fourth quarter of 2019, and later in March, were already adjusted for the new economic environment.
In terms of our approach, we have assumed that most REITs will be deferring rental payments from a fraction of their tenant rolls for a period of two months.