Gaming and Leisure Properties Stock Upgraded Following Interest Rate Cuts and Strong Pipeline
Gaming and Leisure Properties (NASDAQ: GLPI) received an upgrade from Deutsche Bank analyst Carlo Santarelli, who raised the rating to "buy" from "hold" with a new price target of $54, up from $49.
GLPI company logo
Key factors driving the upgrade include:
- More favorable interest rate environment
- Investors seeking lower-risk gaming investments
- Strong balance sheet with healthy tenant coverage
- Attractive product pipeline
- Compelling valuation metrics
The REIT's performance has been modest in 2024, with shares up just 1% year-to-date compared to the S&P 500's 24% gain. Recent Federal Reserve rate cuts, including a 50-basis-point reduction in September and a 25-basis-point cut earlier this month, could benefit GLPI as real estate typically responds positively to looser monetary policy.
Notable advantages of GLPI include:
- Nearly 6% dividend yield
- Strong geographic diversification
- Diverse tenant portfolio
- Limited Las Vegas exposure
- Healthy pipeline of upcoming projects
The company's pipeline includes ownership of Bally's permanent Chicago casino real estate and involvement in a Las Vegas MLB stadium project with an associated casino hotel.
With expectations of multiple Fed rate cuts in early 2025 and GLPI's strong fundamentals, the company appears well-positioned for growth while offering investors a lower-risk option in the gaming sector.
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