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Brixmor Property Group’s recent second-quarter earnings beat is only the beginning of potential growth for shopping center real estate investment trust, according to Goldman Sachs. The Wall Street bank upgraded BRX to buy from neutral on Wednesday, with a $27 per share price target up from $23. Goldman’s forecast implies nearly 22% upside from Tuesday’s $22.21 close. BRX YTD mountain Brixmor Propery Group stock. Brixmor stock has dipped about 2% from the start of the year. The company reported June quarter funds from operations of 52 cents per share, according to FactSet, while analysts polled had forecast 50 cents. Analyst Caitlin Burrows said the New York-based company could boost funds from operations per share (FFOPS) of 3.2% in 2023 alone, while climbing to 4.5% in 2024 and 2025, respectively. Growth will be driven by a favorable leasing spread, strong signed by not occupied (SNO) projections as well as an upside-skewed occupancy opportunity, she said. “BRX’s ability to mark below-market leases to market is a meaningful opportunity, where BRX’s overall [trailing twelve months] leasing spreads (including new, renewal, and options leases) hit their highest point in the last 6 years during 2Q23,” Burrows said. “While the upside is not new, we believe investors increasingly value the reliability of this source of cash flow growth.” Brixmor will also be shielded in large part from rising interest rates because it carries minimal floating rate debt and faces no “significant” debt maturities until June, 2024, the analyst added. — CNBC’s Michael Bloom contributed to this report.
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