Broadstone Net Lease (BNL) Raises Fresh Equity, Is The 9% Undervaluation Still Intact?

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Follow on equity offering reshapes the picture for Broadstone Net Lease

Broadstone Net Lease (BNL) has completed a US$225.5 million follow on equity offering of 11,000,000 common shares at about US$20.50, shortly after raising full year investment guidance.

This capital raise follows a recent US$303 million joint venture agreement for an advanced technology facility in Colorado that is tied to a Fortune 20 investment grade tenant. The project is expected to become Broadstone Net Lease’s largest tenant by annual base rent.

Alongside the joint venture, the company lifted its full year AFFO per share guidance to US$1.56 and reiterated progress on Project Triboro, a power supplied land site with multiple development paths under review.

See our latest analysis for Broadstone Net Lease.

Recent news around Broadstone Net Lease, including the Colorado joint venture, higher full year guidance and the follow on equity issuance, comes after a 19.87% year to date share price return and a 32.58% 1 year total shareholder return. This points to momentum that has cooled slightly in the past month.

If this kind of deal activity has your attention, it can be a good time to see what else is on the move and scan 37 power grid technology and infrastructure stocks

Recent gains and the follow on offering suggest investors are weighing Broadstone Net Lease’s Colorado deal and guidance lift against a cooler month of trading. How much of today’s price reflects business progress rather than sentiment swings?

Most Popular Narrative: 9.4% Undervalued

Broadstone Net Lease last closed at $20.93, while the most widely followed narrative places fair value at $23.10, using a 7.6% discount rate and a detailed earnings path.

The analysts have a consensus price target of $23.1 for Broadstone Net Lease based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the more bullish reporting a price target of $26.0, and the most bearish reporting a price target of just $20.0.

Read the complete narrative.

Want to see what is behind that fair value gap? The narrative focuses on measured revenue growth, firmer margins and a richer future earnings multiple. Curious which assumptions carry the most weight?

Result: Fair Value of $23.10 (UNDERVALUED)

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

However, you also need to factor in risks to the Broadstone Net Lease story, including tenant credit issues and leverage that is currently near the upper end of targets.

Find out about the key risks to this Broadstone Net Lease narrative.

Next Steps

Feeling mixed about Broadstone Net Lease after all of this, with both risks and rewards on the table? It makes sense to move quickly, test the numbers for yourself, and then weigh both sides through the 3 key rewards and 1 important warning sign.

Looking for more Broadstone Net Lease sized opportunities?

If Broadstone Net Lease has you thinking more broadly about your portfolio, now is the moment to scan for fresh ideas before the next wave of moves passes you by.

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.

Companies discussed in this article include BNL.

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