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BMO Capital Markets started coverage of three net-lease real estate investment trusts, handing out Outperform ratings to Agree Realty (NYSE:ADC), Essential Properties (NYSE:EPRT) and Global Net Lease (NYSE:GNL), according to a Tuesday note.
Agree Realty (ADC), which is slated to publish its Q4 results after the closing bell, has a ground lease portfolio that provides safety in the wake of uncertainty as it’s mainly comprised of investment-grade tenants, analyst Eric Borden pointed out.
On the offensive side, he added, ADC’s “low cost of capital can facilitate accretive acquisitions” to drive above-peer average AFFO per share growth.
For Essential Properties (EPRT), its “smaller asset acquisition model focused on middle-market, service, and experience-based tenants should continue to support leading earnings growth, while the company looks to maintain conservative leverage,” Borden wrote.
Global Net Lease (GNL), meantime, is trading at a 57% discount to peers, partly due to its high leverage, but analyst John Kim pointed to positive catalysts including debt reduction and potentially M&A.
SA’s Peer tab compares numerous metrics of the aforementioned REITs.
Despite BMO’s upbeat coverage, all three REITs changed hands in the red in Tuesday morning trading, with ADC down 2.5%, GNL -2.4% and EPRT -2.2%.
