Kite Realty Group Trust (KRG)

From CFRA We raise our target price by $5 to $21, equal to 13.5x our 2020 FFO estimate and closer to the peer average of 14.3x given KRG's improved portfolio and metrics. We keep our 2019 and 2020 FFO estimate at $1.65 and $1.55, respectively. KRG reported Q3 FFO per share of $0.39 vs. $0.48, $0.01 below consensus. Same-property net operating income (NOI) grew 2.3%. Retail leased percentage was 95.4%, up 190bps year-over-year with small shop leased percentage at a new high of 92.0% and up 110bps from the prior year. Leasing spreads jumped 24.3% on a cash basis. KRG has completed its disposition program with 8 non-core assets sold in Q3 and an additional three sold subsequent to quarter end; year-to-date dispositions totaled $502 million. With the program complete and KRG's operating metrics climbing to match peers, we see shares trading up closer to the peer average, presenting an opportunity for capital gains with a 7% dividend yield adding to total return.