UPDATE: Citigroup Upgrades Tanger Factory Outlet Centers to Buy, Raises PT

In a report published Monday, Citigroup upgraded its rating on Tanger Factory Outlet Centers

from Neutral to Buy, and raised its price target from $31.75 to $37.50. Citigroup noted, “SKT's pure play outlet portfolio should continue to deliver solid NOI growth outperformance, and SKT's re/development pipeline is meaningful. The recently announced partnership with SPG for two development properties reduces competitive threats. Shares have underperformed retail REITs (though still up 15%) partly as a result of fears on excess development, though we believe that only a small proportion of proposed projects will proceed. We are upgrading SKT to Buy from Neutral and increasing our target price from $31.75 to $37.50, which is at a ~29% premium to our NAV estimate. We use a ~26x AFFO multiple and a ~22x FFO multiple on 2013 estimates given the strength of outlet centers, organic growth capabilities, low leverage, and limited balance sheet risk.” Tanger Factory Outlet Centers closed on Friday at $33.11.