TSX:APR.UN - Post Discussion
Post by
TeamCommonSense on Nov 20, 2024 11:50am
Analyst update
* Scotia’s Himanshu Gupta bumped his Automotive Properties REIT (APR.UN-T) target to $13 from $12.50 with a “sector perform” rating. The average is $13.25.
“Going into 2025, this almost looks like APR 2.0. (i) APR is now entering the U.S. automotive dealership market, and the heavy construction equipment dealership market in Canada,” said Mr. Gupta. “The cap rates are similar at mid-6 per cent to mid-7 per cent, and the strategy is very similar to that of automotive dealerships in Canada. (ii) APR is now prepared to sell assets that could be used for higher and better use.”
“APR has averaged $70-million of acquisitions annually in the last five years, and there is opportunity to double the pace going forward. We think U.S. Net Lease REITs with healthy M&A profiles at attractive investment spreads, tend to trade at premium to NAV. APR trades at 7-per-cent discount to NAV and offers an attractive 6.8% distribution yield.”
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