Stifel has raised its price objective on National Retail Properties (NNN) to $48.50 from $48.00 and left its Buy recommendation intact. The stock was trading at $43.68 at the time of the report, close to a 52-week high of $44.23, and has produced a 14.02% total return over the past year, according to InvestingPro data.
The analyst update follows disclosures the REIT made about the disposition of noncore furniture assets and the ongoing review of its restaurant portfolio. Stifel analyst Simon Yarmak noted that the company's last five furniture properties are under contract, with most expected to close before the end of the current quarter. That progress on asset sales aligns with management’s stated plan to reduce exposure to certain categories.
On the restaurant side, management continues to evaluate properties on an individual basis. National Retail Properties currently holds 32 restaurant assets: 15 are being marketed for sale, 4 are in leasing discussions, and 13 are actively listed for marketing. Stifel reported that management did not flag any material watch list issues for these assets during the recent call.
Financial metrics referenced during the update underscore a resilient balance sheet. InvestingPro assigns the REIT a "GREAT" overall financial health score of 3.06. Stifel also highlighted the company’s guidance assumption for bad debt, which is set at 75 basis points - higher than the REIT’s normal historical realization. The analyst described the elevated assumption as a conservative planning measure rather than a reflection of specific portfolio stress.
National Retail Properties announced fourth-quarter 2025 results that exceeded consensus expectations. The REIT reported earnings per share of $0.51 versus a forecast of $0.4876, a 4.59% beat. Revenue for the quarter came in at $237.54 million, topping the $231.43 million estimate by 2.64%.
Despite the upside to estimates, the stock experienced a modest pullback in pre-market trading, falling 0.25% to settle at $43.20. The combination of progress on asset dispositions and a slightly elevated bad-debt assumption illustrates management’s ongoing emphasis on portfolio optimization while adopting conservative underwriting for the near term.
What this means
- Stifel’s marginally higher price target and maintained Buy rating reflect confidence in the REIT’s disposition progress and operating results.
- Active marketing and leasing activity for restaurant properties indicate a continued focus on repositioning the portfolio.
- Management’s adoption of a higher bad-debt assumption signals conservative financial planning despite no reported material watch list concerns.