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NNN REIT (NNN): Valuation Check After Securing a $300 Million Term Loan for Growth Flexibility

Simply Wall St · 2d ago

NNN REIT (NNN) just lined up a new $300 million senior unsecured term loan facility, giving the company flexible, delayed draw funding it can tap for growth and general corporate needs in a still choppy rate environment.

See our latest analysis for NNN REIT.

That backdrop helps explain why the stock’s latest share price of $40.68 comes with a modest 1 year to date share price return, but a more solid 1 year total shareholder return of 8.4%. This suggests steady income driven momentum rather than a sharp rerating.

If this sort of measured, income focused story appeals to you, it could be a good time to explore other real estate names and discover fast growing stocks with high insider ownership

With shares trading at a small discount to analyst targets but a much deeper gap to some intrinsic value estimates, the real question is whether NNN is a quietly undervalued income compounder or if the market already reflects its future growth.

Most Popular Narrative Narrative: 8.7% Undervalued

With NNN REIT last closing at $40.68 against a most popular narrative fair value of roughly $44.54, the story points to measured upside rather than a moonshot.

The analysts have a consensus price target of $44.544 for NNN REIT based on their expectations of its future earnings growth, profit margins and other risk factors.

In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.0 billion, earnings will come to $425.2 million, and it would be trading on a PE ratio of 25.5x, assuming you use a discount rate of 8.3%.

Read the complete narrative.

Curious what kind of steady growth, margins and valuation multiple are baked into that near term upside case? The narrative leans on tight, disciplined assumptions that might surprise you when you see how they stack up over the next few years.

Result: Fair Value of $44.54 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying acquisition competition and persistent tenant risk could slow external growth and unsettle earnings, which may challenge the carefully constructed upside narrative.

Find out about the key risks to this NNN REIT narrative.

Build Your Own NNN REIT Narrative

If you are not fully convinced by this outlook or would rather rely on your own deep dive, you can quickly build a personalized view of NNN in just a few minutes: Do it your way

A great starting point for your NNN REIT research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.