Modiv recent stock volatility not reflecting operations, says Ladenburg

Ladenburg analyst John Massocca believes Modiv recent stock volatility contrasts with steady operations and 2023 could prove another impactful year in portfolio reshaping story. Specifically, this volatility has not been driven by any announced company activity, and the analyst would anticipate the start of 2023 for Modiv to look much like last year. Essentially, he expects the REIT to continue disposing of non-core office properties and use net proceeds from these sales to largely invest in manufacturing industrial properties. Moreover, Modiv has additional runway beyond capital recycling, given the REIT utilized the accordion feature of its credit facility to lock in an additional $100M of term loan debt in October 2022 and the REIT had only $13.4M of debt maturing through 2026, Massocca adds. Also, given the still unsettled financing market for private industrial investors, Modiv could also pursue more transformative investments even given the REIT’s high cost of equity capital, he argues. The analyst reiterates a Buy rating on the shares with a price target of $18.50.