Wunderlich Securities Cuts Estimates On Balance Sheet Maneuvers On Agree Realty

In a report published Wednesday, Wunderlich Securities analyst Craig Kucera reiterated a Buy rating and $34.00 price target on Agree Realty (NYSE: ADC).

In the report, Wunderlich Securities noted, “We are reducing our earnings estimates due to higher interest expense expectations related to Agree's (ADC) recent $65mm term loan; however, we think this was a prudent move for ADC to lock-in attractive financing costs (~425bp under recent acquisition cap rates) and we continue to find shares compelling.

"Excess free cash flow remains forecasted in the $9mm range in FY15 (~$0.60 of NAV), indicating the potential for additional NAV creation. ADC continues to maintain considerable balance sheet potential while acquiring single tenant retail assets occupied by investment grade tenants. Our $34 price target values ADC at in-line earnings multiples and at 96% of our $35+ NAV estimate.”

Agree Realty closed on Tuesday at $29.50.