UPDATE: Bank Of America Upgrades Regency Centers On Valuation & Competitive Advantages

In a report published Thursday, Bank of America analyst Craig Schmidt upgraded the rating on

from Neutral to Buy, and raised the price target from $62.00 to $67.00. In the report, Bank of America noted, “We are upgrading Regency Centers (REG) to Buy from Neutral based on its attractive valuation, accelerating core fundamentals and quality of its development pipeline. We are positive on REG's development projects currently under construction (average household density per square mile exceeds 1,300) and believe REG's competitive advantage and experience in the development area become more valuable in an improving macro environment. We are increasing our PO for REG to $67 from $62 based on higher NOI estimates, and we forecast +3.5% SS NOI growth in ‘15. We apply a 5.6% cap rate to our forward NOI estimate of $478M. We now apply a 2.5% premium to our forward NAV to derive our PO to reflect REG's development skills and its low levered balance sheet. Combining price appreciation with distribution rate, we estimate a 10.9% total return.” Regency Centers closed on Wednesday at $62.14.