Why Kite Realty Group Trust (KRG) Stock Is Up This Afternoon

NEW YORK (TheStreet) -- Shares of Kite Reality Group Trust (KRG) are up 2.16% to $6.39 in late-afternoon trading on Wednesday after the company announced it closed its merger deal with the privately held Inland Diversified Real Estate Trust, valued at $2.1 billion.

The transaction creates a $4 billion company, and provides a variety of significant financial and operating benefits, such as substantial cash flow, lower capital costs, a stronger balance sheet, and improved synergies from an expanded platform, said Kite Reality CEO John A. Kite.

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Separately, TheStreet Ratings team rates KITE REALTY GROUP TRUST as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:

"We rate KITE REALTY GROUP TRUST (KRG) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, increase in stock price during the past year and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including poor profit margins and weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 10.3%. Since the same quarter one year prior, revenues rose by 37.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • This stock has managed to rise its share value by 9.36% over the past twelve months. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
  • The gross profit margin for KITE REALTY GROUP TRUST is rather low; currently it is at 22.75%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of 10.15% significantly trails the industry average.
  • Net operating cash flow has decreased to $6.46 million or 48.95% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • You can view the full analysis from the report here: KRG Ratings Report
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