NETSTREIT Corp (NTST) Stock Forecast & Price Target

Netstreit Corp exhibits a robust financial outlook, bolstered by an improving external growth scenario highlighted by a lower cost of equity, which has increased by 30% year-to-date, resulting in a 7.2% implied Adjusted Funds from Operations (AFFO) yield. Additionally, the company has successfully expanded its investment spreads to 120 basis points, an increase of 100 basis points year-to-date, indicating enhanced investment efficiency. Projections include a notable acceleration in Affiliated Funds from Operations per Share (AFFOPS) growth to 6% by 2027, up from 3% in the previous two years, underscoring the company's strengthening portfolio and investment accretion potential.

Netstreit Corp faces challenges due to a significant decline in average base rent (ABR) exposure among major tenants, highlighted by Family Dollar's decrease from 4.3% to 2.8% and Walgreens' drop from 3.5% to 2.9%, indicating potential issues in tenant stability. The company's investment activity is hindered by a lack of accretive acquisitions, rising interest rates, and increasing tenant bankruptcies, leading to concerns about potential lost net operating income (NOI) and subsequent dividend cuts. Consequently, the combination of these factors contributes to a negative outlook on Netstreit's financial stability and future growth prospects.