Urban Edge Properties (UE) has received a new Hold rating, initiated by UBS analyst, Michael Goldsmith.
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Michael Goldsmith has given his Hold rating due to a combination of factors impacting Urban Edge Properties. The company shows promising growth in net operating income driven by strong leasing activities, yet it faces challenges due to its significant exposure to tenants who are at risk of closing stores. This includes a notable reliance on Kohl’s, which, while not immediately closing stores, poses a risk due to its large rental spaces and the potential costs associated with re-leasing these spaces.
Additionally, Urban Edge Properties’ portfolio has a higher-than-average exposure to tenants on UBS’s watchlist, which could impact its performance if these tenants begin to close stores. Despite the company’s advantageous location in densely populated areas with high-income households, the uncertainty surrounding its tenant mix and potential store closures limits the stock’s upside potential. As a result, the shares are considered fairly valued, justifying the Hold rating at a slight premium compared to its peers.
According to TipRanks, Goldsmith is a 2-star analyst with an average return of 0.3% and a 49.12% success rate. Goldsmith covers the Real Estate sector, focusing on stocks such as Realty Income, Peakstone Realty Trust, and Agree Realty.
In another report released on October 17, Evercore ISI also maintained a Hold rating on the stock with a $22.00 price target.