Plymouth Industrial REIT’s price target was raised to $20.62 as analysts view Sixth Street’s 45.2% premium offer and the 7.5% implied cap rate as fair and roughly in line with sector norms, reflecting balanced risk/reward at a modest premium to NAV.
Analyst Commentary
- Bullish analysts note Sixth Street’s offer represents a significant 45.2% premium to Plymouth’s volume-weighted average price (VWAP).
- The implied cap rate of 7.5% on the offer is considered fair and roughly in line with industrial sector norms.
- The offer is 1.5% above the consensus net asset value, signaling fair asset valuation and minimal NAV dilution.
- Potential for a 30-day go-shop period exists, though analysts view a competing bidder as unlikely.
- Market Perform rating is maintained due to balanced risk/reward despite the premium offer.
What's in the News
- Sixth Street Partners, LLC proposed to acquire a 90.01% stake in Plymouth Industrial REIT for approximately $1 billion ($24.10 per share), with KeyBanc Capital Markets as financial advisor and Morrison & Foerster LLP as legal counsel to Plymouth.
- The company repurchased 1,031,223 shares (2.26% of outstanding shares) for $16.76 million, completing its buyback program announced previously.
- Plymouth Industrial REIT was dropped from the Russell 2000 Dynamic Index.
- Acquired a 1.95-million-square-foot, 21-building industrial portfolio in Ohio for $193 million, increasing regional footprint to over 12 million square feet. The assets are 97% leased with in-place rents ~22% below market, offering lease-upside potential.
Valuation Changes
Summary of Valuation Changes for Plymouth Industrial REIT
- The Consensus Analyst Price Target has risen from $19.62 to $20.62.
- The Future P/E for Plymouth Industrial REIT has risen from 14.17x to 15.01x.
- The Discount Rate for Plymouth Industrial REIT remained effectively unchanged, moving only marginally from 9.37% to 9.52%.
Disclaimer
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