Granite Real Estate Investment Trust T.GRT.UN

TD

[retiredcf]

Our 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.

December 21, 2022

[ol_griz]

Absurd trading in this name.  Re-leasing is bringing in large increases in revenue.  This should be pushing towards its target, not going the other way. P/AFFO is getting ridiculous relative to historical average.  Has to be retail trading on headlines about REITS and interest rates, which are minimally impactful here.

[rad10]

Yep - ex div today and a few more added through the old DPP at depressed pricing in the third week of Jan.  Whats not to like?