Analyst Haendel St. Juste of Mizuho Securities maintained a Hold rating on SITE Centers (SITC – Research Report), with a price target of $14.00.
Haendel St. Juste’s Hold rating for SITE Centers (SITC) is largely based on the company’s recent announcement to spin off its convenience assets into a newly-formed REIT, Curbline Properties (CURB). This decision was a bit unexpected, given SITC’s own origins as a spin-off from DDR and the relative newness of SITC’s convenience platform. St. Juste agrees, however, with the management’s perspective that this platform was not being accurately valued within SITC and carries some underappreciated risks.
The analyst also believes that the convenience assets have a defensive profile. CURB will be the first public REIT that focuses solely on convenience retail assets. These assets often attract regular visits from a growing population base in high-income suburbs due to their strategic locations along major roads and their simple, small structures. St. Juste also highlights the fact that these assets have a greater exposure to national tenants, lower CapEx spend, and a lower concentration of top 10 tenants, making them more resilient than lifestyle centers or power centers. Furthermore, the analyst sees the spin-off as a strategic move that will help unlock value for SITC’s most undervalued assets. These factors contribute to St. Juste’s Hold rating for SITC.
In another report released on October 31, Compass Point also downgraded the stock to a Hold with a $14.50 price target.
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SITE Centers (SITC) Company Description:
SITE Centers Corp. is a real estate investment trust, which engages in the acquisition, development, lease, and management of shopping centers. It operates through the Shopping Centers and Loan Investments segments. The company was founded in 1965 and is headquartered in Beachwood, OH.
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