Market Overview

Fewer Assets, High Cash Balance Make Equity Commonwealth An Excellent Defensive Stock, Says Stifel

Share:
Fewer Assets, High Cash Balance Make Equity Commonwealth An Excellent Defensive Stock, Says Stifel

A heavy cash balance, strong balance sheet and a "fill and flip" rental strategy make Equity Commonwealth (NYSE: EQC) a "prototypical defensive stock," according to Stifel. 

The Analyst

Stifel's John W. Guinee upgraded Equity Commonwealth from Hold to Buy and modestly raised the stock’s target price from $31 to $32.

The Thesis

EQC has a roughly $2.2-billion cash balance, with net cash comprising over 50 percent of the Chicago-based office REIT’s net asset value, Guinee said in a Thursday note. (See the analyst’s track record here.)

EQC’s "fill and flip" rental strategy of actively selling assets in a still-strong rental environment is a positive defensive catalyst for the stock, the analyst said.

Guinee described the REIT’s strategy as “actively leasing up vacancy at the prevailing market rent with a heavy dose of capex, and then selling the income stream.”

Price Action

At the time of publication, shares of Equity Commonwealth were trading up 2.18 percent at $29.58.

Related Links:

KeyBanc's Guide To REITs In 2018: Expect 5-10% Returns

2 REIT Picks From Bank Of America

Latest Ratings for EQC

DateFirmActionFromTo
Aug 2018CitigroupMaintainsNeutralNeutral
Aug 2018Stifel NicolausDowngradesBuyHold
May 2018JMP SecuritiesMaintainsMarket OutperformMarket Outperform

View More Analyst Ratings for EQC
View the Latest Analyst Ratings

Posted-In: John W. Guinee Office REITAnalyst Color REIT Upgrades Price Target Analyst Ratings Real Estate Best of Benzinga

 

Related Articles (EQC)

View Comments and Join the Discussion!

Analyst: Take Advantage Of Omnicom's 'Chunky' Q4 Report

Riot Blockchain Defends Pivot From Biotech To Crypto: 'Amazon Started Off Selling Books'