Piper Sandler analyst Alexander Goldfarb upgraded the rating on Newmark Group Inc NMRK to Overweight from Neutral at an increased price target of $13 from $7.
The analyst expects 2024 leasing and capital markets to be a surprise on the upside, led by optimism amid an easing rate environment and steady progress of tenants competing for top-tier space.
The analyst expects NMRK to benefit from further loan portfolio sales as lenders reposition their outstanding exposure to recycle capital into more profitable areas.
Consequently, the analyst sees NMRK as a leading CRE recovery play, given its advisory business model.
Amid the Fed reversal on rate cuts disclosed last week, the analyst expects real estate to price in the potential of lower rates, thereby healing the transaction market and encouraging the housing market.
Also, Office is projected to benefit as the potential for lower rates reduces risk premiums and ease refinancing, writes the analyst.
The analyst estimates an FFO of $1.06 for both FY23 and FY24.
Price Action: NMRK shares are trading higher by 4.62% at $10.53 on the last check Wednesday.
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