The average target price of STAG is 39 and suggests 13% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 45.0. This translates into 30% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 35.0. This suggests 1% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

STAG Industrial, Inc. (NYSE: STAG) is a real estate investment trust focused on the acquisition and operation of single-tenant, industrial properties throughout the United States. By targeting this type of property, STAG has developed an investment strategy that helps investors find a powerful balance of income plus growth.

STAG Industrial, Inc.

Real Estate

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is an evident trend. In the past 12 months, the dividend yield has been strong and significantly above its peers. At the same time, the average five-year yield has been significantly higher and exceeded most of its peers. On average, the company pays dividends monthly, which may appeal to investors valuing a regular income stream. 

STAG reported revenue of USD 785mn in the last 12 months, up 2% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 28% from FY24 to USD 1.33. Market expects EPS to reach USD 0.95 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 3ppts and its growth accelerated by 11ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months it exceeded the performance of this peer group by 5ppts and accelerated its growth by 14ppts in the recent month. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 68.5% in the last 12 months, a decline from 98.0% in FY23. 

Historically, STAG has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 31.1%, a growth from 30.1% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 3.7% in the last 12 months, an increase from 3.4% in FY23. The market analysts predict that RoA will be 3.2% in FY24, again stronger than its peers. 

In the last 12 months, the return on capital employed (RoCE) grew to 3.9%, above the peers. The consensus estimate for FY24 for RoCE is 6.7%, again ahead of the peers. 

STAG Industrial, Inc. reported a return on equity (RoE) of 7.1% in the last 12 months, up from 6.3% in FY23. The market consensus projects an RoE of 6.0% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.7 in the past several years. This ratio implies a poor shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

STAG boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually quite stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to negligible return on capital, excessive margin volatility, and poor working capital management. We note robust profitability and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, STAG is not volatile. In other words, the stock will fall far less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be very low. 

In normal market circumstances, STAG is not volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will stay within a narrow range. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. 

From both historical and forecast perspectives, the stock is slightly overpriced compared to similar stocks. Specifically, the stock is 'expensive' on P/E, neutral on EV/EBITDA, overpriced on P/FCF. 

STAG Industrial, Inc.

$ 34.61

5

STAG Industrial, Inc.

$ 34.61

5

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 34.61

About

About

STAG Industrial, Inc.

$ 34.61

5

STAG Industrial, Inc.

$ 34.61

5

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 34.61

About

About

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