Barclays has revised its price target for W.P. Carey (WPC, Financial), raising it slightly from $60 to $61. Despite this adjustment, the firm's analyst, Richard Hightower, continues to hold an Underweight rating on WPC shares. This update follows a recent review of real estate investment trust (REIT) net lease models after the first-quarter reports.
While tenant creditworthiness has not been a problem this year according to the REITs’ relative performance, the firm still considers credit an important factor to monitor. Barclays advises investors to remain cautious, acknowledging that the relevance of credit cannot be disregarded entirely.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for W.P. Carey Inc (WPC, Financial) is $64.00 with a high estimate of $70.00 and a low estimate of $60.00. The average target implies an upside of 4.81% from the current price of $61.06. More detailed estimate data can be found on the W.P. Carey Inc (WPC) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, W.P. Carey Inc's (WPC, Financial) average brokerage recommendation is currently 3.0, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for W.P. Carey Inc (WPC, Financial) in one year is $62.30, suggesting a upside of 2.03% from the current price of $61.06. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the W.P. Carey Inc (WPC) Summary page.
WPC Key Business Developments
Release Date: April 30, 2025
- Investment Activity: $450 million closed year-to-date with a 7.4% initial weighted average cap rate; $275 million closed in Q1.
- Pipeline Visibility: Approximately $570 million of deals for 2025 with a solid near-term pipeline.
- AFFO Per Share: $1.17 for Q1, a 2.6% increase year over year.
- AFFO Guidance: Reaffirmed at $4.82 to $4.92 per share.
- Contractual Same-Store Rent Growth: 2.4% year over year for Q1.
- Comprehensive Same-Store Growth: 4.5% year over year for Q1.
- Operating Property NOI: $16.6 million for Q1.
- Non-Operating Income: $7.9 million for Q1.
- Debt Metrics: Debt-to-gross assets at 41%; net debt to adjusted EBITDA at 5.8 times.
- Dividend: $0.89 per share declared for Q1, representing a 2.9% increase over the prior year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- W.P. Carey Inc (WPC, Financial) closed approximately $450 million in investments with a strong initial weighted average cap rate of 7.4%, and expects the average yield over the life of the leases to exceed 9%.
- The company has a solid pipeline of deals, with visibility into approximately $570 million of transactions for 2025, and expects to close several hundred million dollars of investments in the near term.
- W.P. Carey Inc (WPC) has one of the lowest costs of debt in the net lease sector, with a weighted average cost of debt at 3.2%, supported by refinancing efforts and strategic use of euro-denominated debt.
- The company is making progress on funding investments through non-core asset sales, having sold assets totaling approximately $130 million in the first quarter, with plans to sell more, including a sizable portfolio of self-storage assets.
- W.P. Carey Inc (WPC) reaffirmed its AFFO guidance range of $4.82 to $4.92 per share, with confidence in potentially exceeding the 3.6% growth implied in the guidance due to strong deal momentum and strategic asset sales.
Negative Points
- Uncertainty surrounding tariffs remains a key theme, although it has not yet directly impacted W.P. Carey Inc (WPC)'s business, it poses a potential risk to tenant margins and the broader economy.
- The company is cautious about the potential slowdown in the overall flow of new deal launches amid the current climate of uncertainty, which could impact future investment volumes.
- W.P. Carey Inc (WPC) is actively managing exposure to tenants facing credit difficulties, such as Hellweg, which continues to face a challenging operating environment, including weak German consumer spending.
- The company anticipates potential rent loss from tenant credit events, estimating $15 million to $20 million in potential rent loss, reflecting uncertainty in the macro environment.
- Occupancy slipped slightly from the previous quarter, driven by partial renewals and some vacancies in European warehouses, which the company is actively working to backfill.
