Wolfe Research Starts Sila Realty Trust Inc. (SILA) at Peerperform

Wolfe Research analyst Andy Liu initiates coverage on Sila Realty Trust Inc. (NYSE: SILA) with a Peerperform rating.

The analyst comments "With this report, we initiate on SILA at a Peer Perform as we expect better growth from other sectors. Consistent with Wolfe Research Policy, we omit Price Targets for Peer Perform rated companies. ● Earnings Potential. We estimate the company's long term growth profile at ~4% (Exhibit 6) which decomposes into: ○ Internal growth from: lease escalations (Exhibit 4) and retained cash (Exhibit 5) used for property acquisitions and share repurchases, net of credit reserves. ○ External growth is expected to be a minimal contributor as our estimate of SILA's ex-G&A implied cap rate of ~7.6%, a proxy for cost of capital, is ahead of our estimate of the company's cash cap rate on acquisitions at ~7%. ● Actual earnings growth forecast in our model for 2025-27 (Exhibit 7): ○ 2026 we expect ~6% AFFOPS growth, elevated compared to our long term forecast as current year acquisitions annualize into 2026 along with savings on carry cost on a Stoughton property to be demolished in 2H25. ○ 2027 we believe is more representative of the company's long term growth prospects where we expect ~3% AFFOPS growth (after factoring in items such as G&A growth). This is below our coverage average of ~6% for sectors where we published 2027 estimates. ● Valuation. SILA trades at a discount to both our overall and net lease coverage in terms of multiples and implied cap rates (Exhibit 8). Overlaying multiple with growth (Exhibit 9), On 2027 PEG which we believe to be most representative of long term growth, SILA trades at ~3.4x, similar to our overall coverage at 3.1x."

For an analyst ratings summary and ratings history on Sila Realty Trust Inc. click here. For more ratings news on Sila Realty Trust Inc. click here.

Shares of Sila Realty Trust Inc. closed at $23.89 yesterday.

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