Brixmor Property Group (BRX) Pursues Slate Grocery REIT, Is The Stock Trading At A Discount?
Brixmor Property Group (BRX) has called an M&A discussion to walk investors through its planned acquisition of Slate Grocery REIT, the transaction structure, a joint venture with Everview Partners, and expected earnings accretion.
Recent price action has been softer, with Brixmor Property Group’s share price declining 5.8% over the past month and 11.6% over the last 90 days. However, the year-to-date share price return of 6.2% and a 3-year total shareholder return of 55.9% point to longer term momentum that investors are now weighing against the risks and potential rewards of the Slate Grocery REIT deal.
Compare Brixmor Property Group’s M&A-driven playbook with other real estate operators by scanning our curated list of list of solid balance sheet and fundamentals (25 results) for potential alternatives or complements to your watchlist.
Brixmor Property Group now trades at a steep discount to both analyst targets and intrinsic value estimates after the Slate Grocery REIT announcement. Is that a pricing error, or a fair warning label on the deal risk?
Most Popular Narrative: 22% Undervalued
The most followed narrative on Brixmor Property Group pegs fair value at about $35.39 per share, compared with the last close of $27.57. This puts the current M&A driven pullback up against a valuation framework built before the Slate Grocery REIT deal.
Ongoing anchor tenant upgrades and reinvestment projects, including an active pipeline of about US$302 to 350 million at 9 to 10% yields and more than US$700 million of future projects such as Publix led redevelopments and outparcel densification at about 16% returns, create a multi year path for higher rent per square foot and NOI growth.
See why 2 investors see Brixmor Property Group as 22% undervalued.
Result: Fair Value of $35.39 (UNDERVALUED)
Still, the bullish Brixmor Property Group narrative can crack if tenant bankruptcies drag occupancy lower or if more than US$1 billion of redevelopment projects fail to hit targeted yields.
Find out about the key risks to this Brixmor Property Group narrative.
Next Steps
Mixed messages around Brixmor Property Group can leave even experienced investors second guessing their instincts, so move quickly from headline noise to hard evidence and weigh both sides yourself. The easiest way to see the full balance of optimism and concern is to review our 4 key rewards and 4 important warning signs.
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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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