TSX:GRT.UN - Post by User
Post by
retiredcfon Dec 28, 2022 10:24am
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Post# 35193426
TD
TDOur Action List Picks Granite REIT
GRT.UN-T: C$75.27; ACTION LIST BUY 12-Month Target: C$95.00
We view Granite as a REIT well-positioned to face an economic slowdown given its geographically diversified, high-quality industrial property portfolio. Additionally, SPNOI growth is expected to accelerate to 6%-7% in 2023 vs. 3.5%-4.5% guided in 2022, on robust fundamentals and strong expected uplifts. With ~40% of leases rolling through 2024, Granite can accelerate its capturing of higher market rents. Granite remains well-positioned with low leverage (29%) and limited debt maturities through 2023. On valuation, while the European industrial sector remains strong, macro concerns in the area have led to significant unit underperformance and in turn an excessive valuation discount (current 17.8x 2023 P/AFFO multiple compares to the 16x-24x range since 2017). We believe the unit price is poised to rebound strongly once concerns over the European economy subside.