Analyst Michael Markidis from BMO Capital reiterated a Hold rating on Automotive Properties (APR.UN – Research Report) and keeping the price target at C$11.50.
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Michael Markidis has given his Hold rating due to a combination of factors that reflect both strengths and challenges for Automotive Properties. The REIT’s recent financial performance was consistent with expectations, and its occupancy rate remains at a full 100%, with no lease expirations until the following year. This stability is complemented by a resilient portfolio that has weathered past economic pressures effectively, such as during the pandemic.
Despite these strengths, there are some concerns that justify a Hold rating. The tariff headwinds present a potential risk, although the sentiment among auto dealers has been relatively positive. Additionally, while the REIT’s balance sheet is stable and well-capitalized for future investments, the leverage is expected to increase slightly following recent acquisitions. These factors, combined with the need for valuation alignment in acquisition activities, suggest a cautious approach, resulting in the reaffirmation of the Market Perform rating and the target price of $11.50.