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Ethan Roberts

3 REITs with the Highest Upside According to Analysts

When investors consider the vast universe of real estate investment trust (REIT) stocks they can purchase, it’s always difficult to make well-informed decisions. So it’s always comforting to know that professional analysts who have studied all of the matrices and news of a particular company support your choices.

Analyst ratings also assist investors by pointing out which REITs have the highest potential upside from current prices. Here are three REIT stocks with the highest upside predictions from analysts in the past 30 days, including one with a tremendous upside of 236%:

Braemar Hotels & Resorts Inc. (NYSE:BHR) is a Dallas-based REIT that invests in hotels and luxury resorts across the U.S. from California to Pennsylvania and in Puerto Rico.

Braemar was recently upgraded by Deutsche Bank AG analyst Chris Woronka to $17 from $16 per share. With Braemar recently at $5.05 that represents a huge potential gain of 236%. Refinitiv/Verus also recently upgraded Braemar from Hold to Buy but with no price target given. 

Braemar has produced increases in revenue over the last four consecutive quarters and had higher earnings per share (EPS) in three of those four quarters. The 52-week range is $4.06 to $6.64.

In 2019, Braemar paid a quarterly dividend of 16 cents but then eliminated the dividend until March 2022 when it was reinstated at a penny per share. For investors who are more interested in potential growth than income, Braemar could be a stock with a bright future.

Brandywine Realty Trust (NYSE:BDN) is a commercial REIT that owns, develops, leases and manages 175 properties from its hometown of Philadelphia to Austin, Texas.

The 52-week range of Brandywine is $7.82 to $14.88, but like so many other REITs, its stock has seen its price slashed to a recent price of $8.09.

This past week, Truist Securities analyst Michael Lewis upgraded Brandywine stock from Hold to Buy and set a first-time target price of $11. From its current price, this represents about 37% in upside pricing.

Brandywine’s quarterly dividend of 19 cents has been a stable but slow grower over the past five years and yields over 9% annually. Second-quarter 2022 funds from operations (FFO) of 34 cents was 2 cents better year-over-year. Revenue of $124.04 million was also higher than a year earlier. If the analyst is right, Brandywine could be a great REIT to own at this level.

See also: This Little Known REIT Has Produced Double-Digit Annual Returns For The Past Five Years

Mid-America Apartment Communities Inc. (NYSE:MAA) is a REIT that acquires, leases and manages apartment complexes. The Germantown, Tennessee, firm has over 102,000 units under its control, mostly in the Southeast, Southwest and Midwest areas of the U.S.

Even with rents booming across America, Mid-America has seen its price plummet from $229 at the start of 2022 to $164 recently. Higher interest rates, as with other REITs, are to blame for this downturn.

Anthony Powell of Barclays recently maintained his overweight position on Mid-America and raised the target price to $215 from $211. In addition, Lewis of Truist Securities held his Buy position on Mid-America and upped his target price to $198 from $188. These target prices represent potential price increases of 29% and 19%, respectively. Clearly, Mid-America is well regarded by analysts going forward.

However, investors are advised to use analyst ratings in addition to your own careful research because even the most successful analysts are only correct about 50% of the time.

Looking for high dividend yields without the price volatility?

Real estate is one of the most reliable sources of recurring passive income, but publicly-traded REITs are just one option for gaining access to this income-producing asset class. Check out Benzinga's coverage on private market real estate and find more ways to add cash flow to your portfolio without having to time the market or fall victim to wild price swings. 

Latest Private Market Insights

  • Arrived Homes expanded its offerings to include shares in short-term rental properties with a minimum investment of $100. The platform has already funded over 150 single-family rentals valued at over $55 million.
  • The Flagship Real Estate Fund through Fundrise is up 7.3% year to date and has just added a new rental home community in Charleston, SC to its portfolio.

Find more news, insights and offerings on Benzinga Alternative Investments

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