UPDATE: Stifel Nicolaus Upgrades Tanger Factory Outlet Centers on Positive Outlook

In a report published Wednesday, Stifel Nicolaus analyst Nathan Isbee upgraded Tanger Factory Outlet Centers SKT from Hold to Buy, and named a $36.00 price target.

In the report, Stifel Nicolaus noted, “We are upgrading Tanger shares to Buy from Hold with a $36 price target based on a 6% premium to our $34 NAV at a 6% cap rate. Tanger shares have underperformed year to date and are down 19% from their May 3, 2013, 52-week high of $39.52. SKT shares rarely trade below NAV and the 6.3% implied cap rate provides an attractive entry point, in our view. Retailer demand for high quality outlet center space is robust and Tanger's outlet center portfolio should generate among the strongest internal growth in the retail REIT sector. Tanger should benefit from its dominant industry position and Tanger's active development should create additional value in the years ahead. SKT's balance sheet is strong and the REIT is well positioned to fund its future growth. In light of the potential for a near term interest rate increase – we believe that investors should focus on those REITs/sectors that are best positioned to generate strong internal growth to at least partially offset the potential rising rate impact on asset values - Tanger clearly fits the bill.”

Tanger Factory Outlet Centers closed on Tuesday at $32.02.