Rethinking NetSTREIT's Future: KeyBanc Highlights Concerns Over Accretion And FFO Estimates For NTST

KeyBanc Capital Markets analyst Todd M. Thomas downgraded NetSTREIT Corp NTST to Underweight from Sector Weight with a price target of $13.00. 

The analyst is bearish on the stock, given lower levels of expected accretion from investments, which could be a risk to FY24 FFO estimates.

The analyst sees a narrow spread between the company's current cost of capital and investment yields, which can impact the company's growth outlook.

Notably, the analyst cites that NTST has completed over $900 million of acquisitions since its August 2021 IPO and is on track to complete net investments of more than $450 million this year.

For FY24, the analyst thinks management may have to slow the investments until the economics improves, which can further curb its earnings growth and impact future cash flow growth.

Thomas lowered FY24 FFO per shares estimate to $1.22 (from $1.24) vs. consensus of $1.20, while maintaining the FY23 estimate at $1.21 vs. street view of $1.15.

NTST is expected to release Q3 FY23 earnings on October 26, 2023. 

Price Action: NTST shares are trading lower by 2.29% at $14.95 on the last check Thursday.