UPDATE: FBR Capital Markets Initiates Coverage on Cole Real Estate on Multiple Positive Factors
In a report published Friday, FBR Capital Markets analyst Daniel Altscher initiated coverage on Cole Real Estate Investments (NYSE: COLE) with an Outperform rating and $14.00 price target.
In the report, FBR Capital Markets noted, “We think Cole is a high-quality net-lease REIT that is trading at a discounted valuation relative to peers. Near-term catalysts (some of which are in process) for the stock include index inclusion/institutional buying, the shift from retail to institutional shareholders, additional sell-side coverage, and downside support from an in-place share buyback authorization. Beyond these catalysts, we think that as the company achieves an investment-grade rating and continues to grow its real estate portfolio, the valuation gap versus other high-quality peers should narrow. Cole's private capital management business also provides business line diversification and another avenue of earnings growth that should propel the stock higher. Given Cole's two distinct business lines—real estate investment and private capital management—we believe a sum-of-the-parts valuation methodology is most appropriate.”
Cole Real Estate Investments closed on Thursday at $12.26.
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