"[W]e believe 1) the company can outperform peers in terms of fewer store closings as traditional retailers retrench; and (2) the prospects for the current development pipeline (focused outside the continental US) are more attractive than recent-past developments," analyst Andrew Rosivach wrote in a note.
The analyst said Taubman's portfolio is near its highest productivity, and development pipeline pre-leasing is well above those of some recent-past completions.
On a blended basis, the analyst estimates 9.5 percent annual FFO growth through 2020 — 380 basis points above Goldman's coverage average.
Rosivach noted that the company's 2017 earnings guidance has lower risk than previous periods as its long-term EBITDA growth targets include the earn-in of development.
"Lastly, we think retailer retrenchment can be bullish for TCO, as we believe it will face fewer closings on a relative basis," Rosivach continued.
Despite maintaining 2016 FFO target of $3.82, the analyst cut his 2017/2018 FFO estimates to $3.93/$4.39 from $4.05/$4.43.
Rosivach also increased his 12-month price target to $87, implying 15 percent return potential.
Shares of Taubman closed Tuesday's trading at $75.50.
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