Skip to main content

Market Overview

Tanger Factory Outlet's Fundamentals Are Deteriorating, KeyBanc Says In Downgrade

Share:
Tanger Factory Outlet's Fundamentals Are Deteriorating, KeyBanc Says In Downgrade

Tanger Factory Outlet Centers Inc. (NYSE: SKT), the REIT owner of the Tanger Outlet chain, reported Tuesday after the market close with forecast-beating first-quarter results and lower full-year guidance. 

The Analyst

KeyBanc Capital Markets analyst Todd Thomas downgraded Tanger Factory Outlet from Sector Weight to Underweight with a $19 price target.

The Thesis

Tanger Factory Outlet's pure-play outlet center portfolio is witnessing a rapid deterioration, Thomas said in a Tuesday note, citing a 1.5-percent decline in same store net operating income, or SSNOI, in Q1 compared to a 0.4-percent drop in Q4.

Despite attempts to preserve occupancy by offering rent relief, the analyst said occupancy continued to fall by 30 basis points year-over-year.

The analyst said he expects leasing to continue to struggle, as the number of short-term deals increased.

KeyBanc attributed the lower FFO and SSNOI growth guidance for fiscal 2018 to a higher level of store closures and more rent relief being granted than anticipated. 

"While the increase in weather-related expenses should ease in future quarters, we expect the operating environment to remain challenging," Thomas said. 

The Price Action

Tanger was down 8.5 percent at $20.42 at the time of publication Wednesday afternoon. 

Related Links:

Going Global With Real Estate ETFs

Stifel Downgrades 3 Medical Office REITs As Rising Rates Pressure Cost Of Capital, Investment Spreads

Photo by Billy Hathorn/Wikimedia. 

Latest Ratings for SKT

DateFirmActionFromTo
Sep 2020KeyBancUpgradesUnderweightSector Weight
Jul 2020Goldman SachsReinstatesNeutral
Jun 2020JP MorganMaintainsUnderweight

View More Analyst Ratings for SKT
View the Latest Analyst Ratings

 

Related Articles (SKT)

View Comments and Join the Discussion!

Posted-In: KeyBanc Capital Markets Todd ThomasAnalyst Color REIT Downgrades Analyst Ratings Real Estate Best of Benzinga

Latest Ratings

StockFirmActionPT
FSRMorgan StanleyMaintains40.0
NATJefferiesMaintains2.8
MEDDA DavidsonMaintains302.0
VICRBWS FinancialMaintains120.0
PSXMizuhoMaintains96.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com