Last Update 08 Jan 26

BNL: Higher 2025 Investment Plans And Investor Day Outlook Will Support Upside

Narrative Update on Broadstone Net Lease

The analyst price target for Broadstone Net Lease has moved to $20 from $18, as analysts point to the company's higher FY25 investment volume target and the potential for more clarity at the upcoming investor day as key supports for this change.

Analyst Commentary

Analysts are reacting to Broadstone Net Lease's updated FY25 investment volume target and the higher price target, using both to reassess how much upside and risk they see in the story.

Bullish Takeaways

Bullish analysts view the higher FY25 investment volume target as a signal that management is confident in its ability to source and close deals, which they see as a support for the updated US$20 price target.
Some see the potential for current 2026 assumptions to be conservative if the current investment volume trend continues, which they view as an upside skew to future cash flow expectations.
The upcoming investor day is viewed as an opportunity for management to provide more detail on capital allocation and growth plans, which could help reduce uncertainty around execution.
Overall, the move in the target price is presented as recognition that the company’s current plan could justify a higher valuation if it is carried out as outlined.

Bearish Takeaways

Bearish analysts maintain a Hold stance, indicating they still see a balance between upside from the higher investment targets and risks related to execution and market conditions.
There is caution that the view of 2026 assumptions as conservative depends on current trends continuing, which may not be assured over multiple years.
Some are waiting on the investor day for more concrete evidence on how the investment pipeline, funding mix, and returns will translate into shareholder outcomes before revisiting their overall stance.
The updated US$20 target is not accompanied by a more positive rating, which suggests that, for now, valuation is viewed as largely fair relative to the information currently available.

What's in the News

Broadstone Net Lease plans an analyst and investor day to provide a business update and issue 2026 guidance, giving you a clearer view of management's medium term planning (Key Developments).
The company reported substantial completion of the first of two maintenance, repair and overhaul hangars at Dayton International Airport, with contractually scheduled rent beginning on November 1, 2025, and scaling as remaining construction is finished (Key Developments).
The second MRO facility serving Sierra Nevada Corporation at Dayton International Airport is expected to reach substantial completion in the first quarter of 2026, tying project timing directly to future rent levels (Key Developments).
Broadstone Net Lease secured land and started construction on two additional build to suit developments for Hobby Lobby and Academy Sports, both sourced off market and expected to deliver in the third and fourth quarter of 2026 (Key Developments).
Between July 1, 2025, and September 30, 2025, the company reported no share repurchases under the buyback program announced on May 1, 2025, with total repurchases under that authorization at 0 shares for $0m (Key Developments).

Valuation Changes

Fair Value: Model fair value per share is unchanged at US$20.18.
Discount Rate: The discount rate has edged down slightly from 7.61% to 7.60%, a very small adjustment in the risk input.
Revenue Growth: The revenue growth assumption has moved marginally from 6.03% to 6.06%, indicating a very small tweak to top line expectations.
Net Profit Margin: The net profit margin assumption is effectively stable, shifting from 28.10% to 28.07%.
Future P/E: The assumed future P/E multiple is broadly flat, moving from 31.85x to 31.84x.

Strategic focus on industrial and essential retail properties, high-quality leases, and proactive portfolio management supports stable occupancy, resilient earnings, and margin expansion.
Prudent capital recycling and relationship-driven acquisitions enable consistent portfolio growth, reduced risk, and sustainable cash flow independent of equity market fluctuations.
Reliance on acquisition-driven growth, rising competition, tenant credit risk, and industry headwinds collectively threaten earning stability, margins, financial flexibility, and long-term portfolio value.

Catalysts

About Broadstone Net Lease

BNL is an industrial-focused, diversified net lease REIT that invests in primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants.What are the underlying business or industry changes driving this perspective?

The company's robust pipeline of build-to-suit industrial and essential retail properties is positioned to capitalize on the continued growth of e-commerce, logistics, and supply chain modernization-trends driving strong demand for modern distribution and last-mile facilities, which should translate to above-market ABR growth and higher future revenue.
Population growth and suburbanization, particularly in key Sun Belt and suburban markets, are supporting tenant demand for service-oriented, essential businesses, enabling BNL to maintain high occupancy (99%+), stable tenant performance, and reliable rent collections, which provides a long-term underpinning for earnings growth and net margin stability.
BNL's consistent focus on underwriting high-quality, long-term single-tenant net lease agreements-often with built-in rent escalators now trending above 2.5%, especially in new industrial and build-to-suit projects-should enable reliable and inflation-protected growth in contractual rental income, directly supporting higher earnings and margin expansion.
Disciplined portfolio repositioning-reducing exposure to riskier healthcare and office assets while recycling capital into resilient industrial and retail assets-has improved risk-adjusted returns and reduced lease rollover risk, which should lead to future multiple expansion and increased AFFO per share.
The company's proven ability to source relationship-based acquisitions and execute value-creating build-to-suit developments, while prudently managing leverage and self-funding growth through dispositions at attractive cap rates, allows BNL to maintain portfolio growth and expansion of cash flows independent of volatile equity markets, reducing financing risk and supporting NAV growth.

Broadstone Net Lease Earnings and Revenue Growth

Broadstone Net Lease Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Broadstone Net Lease's revenue will grow by 5.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 22.1% today to 28.6% in 3 years time.
Analysts expect earnings to reach $148.3 million (and earnings per share of $0.67) by about September 2028, up from $97.7 million today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as $181.5 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 33.0x on those 2028 earnings, down from 35.9x today. This future PE is greater than the current PE for the US REITs industry at 29.4x.
Analysts expect the number of shares outstanding to grow by 0.31% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.62%, as per the Simply Wall St company report.

Broadstone Net Lease Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent tenant credit risks remain, especially with high-profile tenants like At Home and Claire's facing or considering bankruptcy, which could negatively impact occupancy rates, lease revenue, and near-term earning stability if replacements are not rapidly secured or if market rents fail to fully offset lost income.
Intensifying competition from both private and institutional buyers, particularly in the industrial and retail net lease market, is driving up acquisition prices, compressing investment yields, and increasing the challenge of sourcing accretive deals-potentially pressuring net margins and long-term return on investment.
Heavy reliance on regular property acquisitions and build-to-suit developments, funded by a mix of retained cash flow, asset sales, and increasing leverage (recently at 5.2x net debt, with willingness to approach 6x), exposes Broadstone to elevated balance sheet risk and heightened interest expense, especially in environments of persistently high or rising interest rates, impacting future earnings and financial flexibility.
Sectoral shifts-such as growing e-commerce and automation-may render certain specialized or highly customized properties more difficult to re-tenant or repurpose over time, elevating the risk of asset obsolescence and depressed residual values, which could hurt both revenue growth rates and net asset value.
Broader industry headwinds-including ongoing cap rate compression, possible tax law changes affecting REITs, and rising property costs related to ESG compliance or climate risks-could weaken the attractiveness of REIT investments, increase operating costs, and erode investor demand and capital raising ability, impacting both share price and long-term earnings prospects.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $19.7 for Broadstone Net Lease based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $22.0, and the most bearish reporting a price target of just $17.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $518.6 million, earnings will come to $148.3 million, and it would be trading on a PE ratio of 33.0x, assuming you use a discount rate of 7.6%.
Given the current share price of $18.55, the analyst price target of $19.7 is 5.8% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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