KeyBanc Starts STORE Capital (STOR) at Hold

KeyBanc initiated coverage on STORE Capital (NYSE: STOR) with a Hold rating.

Analyst Craig Mailman said, "Despite the attractive earnings growth potential and the $600M-$700M of dry powder post-IPO, our view on the stock is balanced by fair valuation and the Oaktree overhang. The stock has outperformed the MSCI U.S. REIT Index by over 700 bps since the IPO and now trades at a 5.8% and 5.0% multiple discount on 2015E AFFO relative to peers Realty Income (O-NYSE; Not Covered) and National Retail Properties, Inc. (NNN-NYSE; Not Covered), respectively. We view this discount as fair given STOR’s tenure as a public company. In addition, STOR is a controlled company with Oaktree Capital owning a ~71% stake pro forma the IPO, which will likely create an overhang on the shares. While we have been negative on the triple-net group in 2014 given our preference for property types that are more leveraged to economic improvement, we acknowledge that historically low interest rates make the group look more interesting."

For an analyst ratings summary and ratings history on STORE Capital click here. For more ratings news on STORE Capital click here.

Shares of STORE Capital closed at $20.40 yesterday.

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