Baird upgrades EastGroup, sees REITs outperforming in 2023

Baird analyst David Rodgers upgraded EastGroup Properties to Outperform from Neutral with an unchanged price target of $170. While sentiment around real estate continues to erode given reduced capital availability, higher capital costs and expectations for an emerging recession, the "substantial majority in asset value and earnings erosion has already occurred," Rodgers tells investors in a research note. The analyst says the higher use of financial leverage for real estate investment trusts has more quickly had an impact on values and earnings than the broader market, and that he expects underlying stability of real estate cash flows will help the group to outperform the broader market during 2023.