Kennedy-Wilson Receives a Buy from BTIG

By George MacDonald

BTIG analyst Mark Palmer reiterated a Buy rating on Kennedy-Wilson (NYSE: KW) today and set a price target of $32. The company’s shares opened today at $24.62.

Palmer observed, “Mgmt. Faces Hurdle of Explaining KW’s Progress During the conference call following the release of Kennedy-Wilson Holdings’ (KW, Buy, $32 PT) 2Q15 results on August 6, CEO William McMorrow described the company’s financial results during the quarter as “the second-best in our history, only exceeded by the financial results of the second quarter of 2014.” However, KW had reported 2Q15 adjusted earnings per share of $0.27, trailing the consensus estimate by a nickel, and its adjusted EBITDA of $112.8mm was down by $9.4mm year-over- year. The company’s shares traded off by more than 4% when they opened for trading the following morning. So what are investors to make of the incongruity between McMorrow’s statement and the perception of KW’s 2Q15 results? We believe that, upon closer examination, the CEO’s comment holds water. When acquisition-related gains of $45.9mm and $52.5mm are excluded from KW’s adjusted EBITDA in 2Q15 and 2Q14, respectively, the company’s adjusted EBITDA from continuing operations was just $2.8mm less than its all-time high. Moreover, KW completed approximately $1.77bn in transactions during 2Q15: $1.05bn in acquisitions and $720mm in dispositions. Those acquisitions were executed at an average cap rate of 7%, while the dispositions were executed at an average cap rate of 4.5%.”

Kennedy-Wilson has an analyst consensus of Strong Buy, with a price target consensus of $37.

The company has a one year high of $27.92 and a one year low of $21.88. Currently, Kennedy-Wilson has an average volume of 395.5k.

Like BTIG`s latest rating, based on the recent corporate insider activity of 39 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 KW in relation to earlier this year. Last month, Kent Mouton, a the General Counsel of KW sold 10,000 shares for a total of $144,500.

According to TipRanks.com, Palmer is ranked 0 out of 5 stars with an average return of -5.5% and a 40.0% success rate. Palmer covers the Financial sector, focusing on stocks such as Santander Consumer USA, Mgic Investment Corp., and Assured Guaranty Ltd.

Kennedy-Wilson Holdings Inc is a vertically integrated real estate investment and services company. It acquires, renovates and holds yields or resells commercial and residential real estate, and invests in loan pools and discounted loan portfolios.