NETSTREIT Corp (NTST) Stock Forecast & Price Target

Netstreit Corp demonstrates a robust financial outlook, driven by a favorable external growth environment and a significant reduction in its cost of equity, which has seen a 30% increase year-to-date. The company boasts an implied Adjusted Funds From Operations (AFFO) yield of 7.2%, which enhances investment spreads to a notable 120 basis points, reflecting improved portfolio quality and investment potential. Furthermore, projections indicate a growth acceleration in AFFO per share of approximately 6% by 2027, an increase from the anticipated 3% growth in 2025 and 2026, signifying a strengthening financial trajectory.

The analysis indicates that Netstreit Corp faces significant challenges, as highlighted by a marked decline in average base rent (ABR) exposure for key tenants, including Family Dollar and Walgreens, which reflects growing tenant credit and concentration risks. Furthermore, the company is experiencing difficulties in sourcing sufficient accretive acquisitions, compounded by rising interest rates and the potential for tenant bankruptcies leading to diminished net operating income (NOI) and possible dividend cuts. The decline in ABR exposure for major tenants, combined with a stagnant investment pipeline and pressures from the broader economic environment, contributes to a negative outlook for Netstreit's financial performance.