UPDATE: Bank of America Upgrades Spirit Realty Capital to Buy, Raises PT on Valuation

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In a report published Tuesday, Bank of America analyst Juan C. Sanabria upgraded the rating on
Spirit Realty CapitalSRC
from Neutral to Buy, and raised the price target from $11.50 to $12.00. In the report, Bank of America noted, “We are upgrading SRC to Buy from Neutral on valuation with a $12 PO. SRC is currently trading at a 23% discount on 2015E FFO to its closest peers (NNN & O) with a 5.9% distribution rate. In addition, we estimate SRC is currently trading at an attractive 6.8% implied cap rate vs. a 6.0% average for NNN & O. We continue to like SRC's focus on middle market tenants, management's acquisition track record and its modest size off of which to grow ($6.7B gross assets). SRC has a solid, tenured management team that has proactively de-risked the company since its IPO. Lastly, we note SRC may be an attractive target in a quickly consolidating triple-net space given its discounted valuation vs. peers.” Spirit Realty Capital closed on Monday at $11.46.
Posted In: Analyst ColorUpgradesAnalyst RatingsBank of AmericaJuan C. Sanabria
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