Wunderlich Securities Raises NAV for Investors Real Estate Trust as Accretive Development Starts Continue

In a report published Thursday, Wunderlich Securities analyst Craig Kucera reiterated a Buy rating and $10.00 price target on

. In the report, Wunderlich Securities noted, “Investors Real Estate's (IRET) 1Q15 AFFO was in line with our estimate and consensus; however, management announced a number of new developments (bringing IRET's share of the total development pipeline to $290mm) that will be completed over the next 5 quarters. The impact to earnings is limited due to higher G&A costs and our expectation for full stabilization of the pipeline in the back half of FY16; however, our quarterly earnings run upon full stabilization is picking up as is our NAV estimate (from $10.28 to $10.73). IRET trades at 78% of our NAV and 14.2x next year's AFFO vs. peers trading at 18.9x. Our $10 target values IRET at an in-line NAV discount (93%) for diversified REITs and 16.9x FY16 AFFO, a 2x discount to peers. As such, we maintain our Buy rating.” Investors Real Estate Trust closed on Wednesday at $8.39.