Valued at a market cap of $15.8 billion, Kimco Realty Corporation (KIM) is a real estate investment trust (REIT) that owns and operates high-quality, open-air, grocery-anchored shopping centers and mixed-use properties in the United States. The Jericho, New York-based company’s tenant mix is focused on essential, necessity-based goods and services that drive multiple shopping trips per week.
Companies worth $10 billion or more are generally described as “large-cap” stocks, and KIM fits right into that category. The company has specialized in shopping center ownership, management, acquisitions, and value-enhancing redevelopment activities for more than 60 years and owns interests in 567 U.S. shopping centers and mixed-use assets comprising 101 million square feet of gross leasable space as of September 30, 2024.
KIM is currently trading 9.3% below its 52-week high of $25.83, reached on Nov. 29. Shares of this REIT have increased marginally over the past three months, underperforming the broader S&P 500 Index’s ($SPX) 4% gains during the same time frame.
Moreover, in the longer term, KIM has gained 7.7% over the past 52 weeks, lagging behind SPX’s 26.2% returns. Meanwhile, over the past six months, shares of KIM are up 24%, significantly outpacing SPX’s 8.4% gains over the same time frame.
To confirm its recent bearish trend, KIM has been trading below its 50-day moving average since mid-December. Nonetheless, it has remained above its 200-day moving average since late June.
On Oct. 31, shares of KIM fell nearly 1.3% after its Q3 earnings release despite delivering a better-than-expected performance. The company’s FFO of $0.43 per share increased 7.5% from the year-ago quarter and surpassed the consensus estimates of $0.41, while its revenue of $507.6 million also outpaced the forecasted figure by 1.5%. The company also raised its full-year 2024 FFO and net income guidance, reflecting strong financial performance.
However, an increase in pro rata interest expense fueled by higher debt levels and the company’s lowered disposition outlook by $50 million might have dampened investor confidence.
KIM has lagged behind its rival, Federal Realty Investment Trust’s (FRT) 8.4% gain over the past 52 weeks but has significantly outpaced FRT’s 10.8% rise over the past six months.
Despite KIM’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 22 analysts covering it, and the mean price target of $26.08 suggests a modest 11.4% premium to its current levels.
