Kimco Realty upgraded at Compass Point yesterday after RPT deal

As previously reported yesterday, Compass Point upgraded Kimco Realty (KIM) to Buy from Neutral with an unchanged price target of $22 as the firm sees “significant accretion” from the company’s all-stock merger for RPT Realty (RPT). The implied cap rate on RPT of 8.2% is 110 basis points higher than Kimco’s implied cap rate, providing attractive accretion prior to estimated overhead synergies, the analyst tells investors. Kimco’s shares have lagged sector peers meaningfully since the beginning of this year as its relative earnings profile was “less attractive,” but with this deal it will become a $22B enterprise with a pro forma equity cap of $13B, “catapulting” the REIT ahead of Regency Centers (REG) as the largest listed shopping center owner in the U.S., the analyst added.