Wells Fargo made a notable adjustment to its outlook for Iron Mountain Real Estate Investment Trust (NYSE:) (REIT) on Friday, raising its price target to $90 from the previous $80 while maintaining an “outperform” rating on the stock.
The firm singled out Iron Mountain as the best idea in the REIT sector, recognizing the stock’s impressive 50% gain over the past year, notably outpacing the 5% gain of the broader REIT index.
Wells Fargo noted that despite Iron Mountain’s stock price rising, dedicated REIT investors still appear to be underinvested in the company. The firm believes the stock’s recent performance and Iron Mountain’s significant $23 billion market capitalization will likely attract more investor attention.
Wells Fargo analysis shows Iron Mountain trades at approximately 18 times adjusted funds from operations (AFFO) per share, slightly higher than the REIT average of approximately 17 times. However, the company sees potential for further growth given Iron Mountain’s strong shareholder returns, which include both AFFO per share growth and dividends.
The revised $90 price target is based on Iron Mountain’s estimated 18.5 times 25PF AFFO. This adjustment reflects Wells Fargo’s confidence in Iron Mountain’s ability to continue to deliver strong returns to shareholders based on its growth and dividend prospects.
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