KeyBanc Upgrades EastGroup Properties (EGP) to Overweight

KeyBanc analyst Todd Thomas upgraded EastGroup Properties (NYSE: EGP) from Sector Weight to Overweight with a price target of $200.00.

The analyst comments: "While 3Q25 results were mixed (in-line FFO, affirmed guidance, lower rent change than anticipated, and slower pace of development leasing), we expect fundamentals to improve across the Company’s shallow-bay, Sunbelt-focused industrial portfolio. Occupancy remains elevated at 96.6% in the same store and is expected to climb through year-end and rent change is likely to hold relatively steady (20% cash, or higher in the NT); when combined with annual escalators, we see potential for same property NOI to remain in a 6-7% range (FY25 cash
SPNOI growth is forecast to be 6.7% at the midpoint). Looking ahead, and given the improvement in EGP’s cost of capital, we suspect management is eyeing an increase in development starts and acquisitions. While the pace of development has been slower than previously anticipated, an improving industrial backdrop aided by lower levels of new supply nationwide (and meaningfully lower levels of supply growth for smaller, shallow-bay product) should provide support for an increase in new leasing activity. Lastly, EGP’s balance sheet remains strong with leverage ending 3Q25 at 3.0x on a net debt/EBITDA basis (vs. 4.2x for the Industrial REITs and 5.1x
for the REIT weighted average). Shares trade at a 4.9% implied cap rate, which is 80 bps below the Industrial REIT subsector average implied cap rate, and the stock trades at a 4% 2026 AFFO multiple discount vs. the Industrial REIT subsector (or a 3% discount vs. peers TRNO, PLD, FR, and REXR)."

For an analyst ratings summary and ratings history on EastGroup Properties click here. For more ratings news on EastGroup Properties click here.

Shares of EastGroup Properties closed at $179.24 yesterday.

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