General Growth Properties Inc Received its Third Buy in a Row

By Carrie Williams

After Stifel Nicolaus and SunTrust Robinson assigned a Buy rating to General Growth Properties Inc in the last month, the company received another Buy, this time from Boenning & Scattergood. Analyst Floris van Dijkum assigned a Buy rating to General Growth Properties Inc (NYSE: GGP) today and set a price target of $34.50. The company’s shares closed on Friday at $22.20.

van Dijkum observed:

“We have outlined that the value of GGP’s malls is $35 per share, using higher cap rates for its ‘B’ mall portfolio. The most recent mall portfolio trade, the sale of Forest City Realty Trust, Inc.’s (FCEA-$24.92-Not Rated) malls to Queensland Investment Authority at an estimated 5.1% cap rate, was of lower quality than GGP, including several ‘B’ assets and also involving a major minority owner increasing its stake. Moreover, ‘A’ mall cap rates between 4% and 5% depending on the grade plus lower than historical 2% SS NOI growth should deliver approximately 6.5% total returns, in excess of the historical spread to BBB yields. As a reminder, we underwrite every single mall for each listed property company and use a cap rate grid based on the asset quality grade. Few have the data to underwrite portfolios in such a manner, but we believe that our approach is more accurate.”

According to TipRanks.com, Dijkum is a 3-star analyst with an average return of 3.0% and a 55.7% success rate. Dijkum covers the Financial sector, focusing on stocks such as Pennsylvania Real Estate ate Investment, Retail Properties of America Inc, and Washington Prime Group Inc.

Currently, the analyst consensus on General Growth Properties Inc is Moderate Buy and the average price target is $25.64, representing a 15.5% upside.

In a report issued on October 29, Stifel Nicolaus also reiterated a Buy rating on the stock with a $24 price target.

General Growth Properties Inc’s market cap is currently $19.38B and has a P/E ratio of 31.27. The company has a book value ratio of 2.4076.

Based on the recent corporate insider activity of 51 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of GGP in relation to earlier this year.

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GGP, Inc. is a real estate investment trust, which operates, manages, develops, and acquires retail and other rental properties in regional malls. The portfolio of regional malls represents a collection of retail properties that are targeted to a range of market sizes and consumer tastes.