Citi Downgrades Lamar Advertising, Growth Will Prove A Challenge

Citi Equity Research issued a report on Lamar Advertising REIT Co LAMR. Citi downgraded Lamar Advertising REIT from Buy to Neutral and raised its price target from $55 to $61.

Jason Bazinet and Christopher Lo, analysts at Citi, wrote, "If Lamar is successful attracting REIT investors to the outdoor category, our downgrade may be premature. But, we suspect the likelihood of material multiple expansion is modest."

The analysts discussed that Lamar Advertising REIT's top line growth is driven by three categories: Bulletin, Poster and Digital. Of those three only Digital is expected to grow above 5 percent annually. Thus, Lamar Advertising has to find a way to drive growth from multiple channels to increase the company's value.

Lamar Advertising REIT is currently trading at $58.76, up 1.50 percent.