UPDATE: BMO Capital Markets Reiterates Market Perform Rating, Lowers PT on Investors Real Estate Trust Following Investor/Analyst Day

In a report published Monday, BMO Capital Markets analyst Richard C. Anderson reiterated a Market Perform rating on Investors Real Estate Trust IRET, but lowered the price target from $10.00 to $9.00. In the report, BMO Capital Markets noted, “We participated in IRET's first-ever investor/analyst day in Minneapolis last week, and we found the event helpful in crystallizing the future direction of the company. The majority of the balance sheet improvement effort is now behind IRET. Net debt/EBITDA of 6.6x is within the range of its REIT peers, and will likely decline further as the company makes further operating improvements. That said, a FY2014 equity raise of $50-$75 million (in part to fund development) may be necessary so as not to lose ground on the progress that has been made. Bigger picture, IRET provided directed information on the opportunities related to its proximity to the Bakken Shale oil fields which we discuss in detail. As the company enhances operations and improves the quality of the portfolio, the net of it all could be a covered dividend within the next 12 to 24 months. At a payout ratio today of ~111%, we think dividend progress is the key to IRET reducing its cost of capital, and by extension, gaining broader attention from institutional investors. We think the evolution of multi-family REIT MAA could provide a roadmap for IRET to become a more mainstream investment option for institutional investors.” Investors Real Estate Trust closed on Friday at $8.99.