Truist cuts Plymouth Industrial REIT target to $24; keeps buy rating

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Truist cuts Plymouth Industrial REIT target to $24; keeps buy rating
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On Wednesday, Truist Securities adjusted its price target for Plymouth Industrial REIT (NYSE:PLYM) to $24 from the previous $26, while retaining a Buy rating on the stock. The adjustment comes amid concerns regarding the upcoming lease expirations of PLYM's top three tenants, which account for 5.8% of the company's annual base rent (ABR). These tenants are located in the Metro East submarket of St. Louis, an area currently experiencing pressure from new market supply.

According to CoStar, the vacancy rate in this submarket stands at 10.7%. Plymouth Industrial REIT is proactive in addressing the potential impact of these lease expirations, with planned meetings with tenants Geodis and Royal Canin scheduled for this year, well before their lease end dates in 2025. These discussions are seen as an indicator of a possible lease renewal, which could serve as a positive driver for the stock.

Despite the potential risks associated with the lease expirations, Truist Securities maintains a positive outlook on Plymouth Industrial REIT. The firm cites the REIT's attractive valuation and the favorable lease rollover profile in 2025 as key reasons for sustaining the Buy rating.

Truist's stance reflects a belief in the stock's potential, even as it navigates the challenges posed by the current real estate market conditions.

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