NNN REIT (NNN): Assessing Valuation After a 9% Three-Month Pullback
NNN REIT (NNN) has quietly slipped about 9% over the past 3 months, even as its long lease terms and steady rent checks keep rolling in, creating an interesting setup for income focused investors.
See our latest analysis for NNN REIT.
Zooming out, that 9% three month share price slide to about $39 still comes after a much softer year to date share price return and a slightly negative one year total shareholder return. This suggests momentum has cooled even as long term total shareholder returns remain respectable.
If NNN’s recent pullback has you rethinking where to find steady income, you may also want to explore healthcare stocks as another pocket of potential resilience.
With shares lagging despite solid rent growth, a long dividend streak, and a double digit discount to analyst targets, is NNN quietly undervalued today, or is the market already baking in its future cash flow growth?
Most Popular Narrative Narrative: 11.8% Undervalued
With NNN REIT last closing at $39.29 versus a most popular narrative fair value near the mid 40s, the story leans toward quiet upside based on future cash flows.
The company's ongoing acquisitions of properties with initial cap rates around 7.4% and long lease terms averaging over 17 years, amid robust sales-leaseback deal flow and a rising acquisition pipeline, suggest an ability to lock in above-average yields and benefit from favorable inflation-linked rent escalations. This should provide durable growth in FFO and long-term earnings.
Curious how steady, single digit growth, slightly thinner margins, and a richer future earnings multiple can still justify a higher fair value today? The full narrative reveals the exact mix of revenue pacing, earnings expansion, and discount rate assumptions that turn this slow and steady REIT model into an undervalued opportunity on paper.
Result: Fair Value of $44.54 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, rising acquisition competition and persistent tenant risks, including potential bankruptcies, could slow growth, put pressure on rent collections, and challenge the undervaluation thesis.
Find out about the key risks to this NNN REIT narrative.
Build Your Own NNN REIT Narrative
If you see the story differently or want to dig into the numbers yourself, you can spin up a personalized narrative in under three minutes: Do it your way
A great starting point for your NNN REIT research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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