UPDATE: Stifel Nicolaus Downgrades Iron Mountain to Hold, Reiterates $42 PT on Less Likely REIT Conversion

In a report published Friday, Stifel Nicolaus analyst Shlomo Rosenbaum downgraded the rating Iron Mountain IRM from Buy to Hold, but reiterated the $42.00 price target. In the report, Stifel Nicolaus noted, “We are lowering our rating on the IRM shares from Buy to Hold since we believe the probability of converting to a REIT is much less than the 80% chance we had been expecting, given the 8K IRM filed last night. At best we think it is a 50/50 probability, and it is likely much less than that. While we think IRM has a solid business with good cash flow, absent a REIT conversion we think fair value is likely in the mid-to-upper $20 range, based on roughly a 4.5%-5.0% dividend yield, and after-hours trading implies the stock will open in the low $30s range tomorrow. Upside in a REIT scenario is likely around $40, though we think there is much lower likelihood that the stock achieves this target.” Iron Mountain closed on Thursday at $34.40.