Valeo
FR
$61.85
+0.23%
First Industrial Realty Trust, Inc. is a real estate investment trust (REIT) that owns, manages, acquires, sells, develops, and redevelops industrial real estate properties, including warehouses, distribution centers, and light industrial facilities. As a leading player in the industrial REIT sector, it differentiates itself through a fully integrated operating platform and a diverse tenant base spanning e-commerce, logistics, manufacturing, and other supply-chain-critical industries. The current investor narrative centers on the company's ability to sustain growth amid shifting industrial demand, with recent quarterly results showing robust revenue expansion and strong profitability, while the stock has experienced a modest pullback from its 52-week high, prompting debate about valuation and future upside.…
FR
Valeo
$61.85
Investment Opinion: Should I buy FR Today?
Based on the analysis, FR is rated a Buy. The thesis is that the company's strong revenue growth, solid profitability, and favorable industrial real estate fundamentals will drive earnings and dividends, justifying the premium valuation. The analyst consensus is Buy with an average target of $72.25, implying 16.8% upside.
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FR 12-Month Price Forecast
The AI assessment is bullish on FR over the next 12 months, driven by strong revenue growth and a favorable industrial real estate market. The stock's valuation is high, but the growth trajectory and analyst confidence support further upside. Key risks include interest rate increases and potential earnings normalization. If revenue growth continues above 10% and interest rates remain stable, the stock could reach the analyst high target. Conversely, if growth decelerates or rates spike, the stock may underperform. The stance would be upgraded to high confidence if the company delivers another quarter of double-digit revenue growth and maintains occupancy.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Valeo's 12-month outlook, with a consensus price target around $72.25 and implied upside of +16.8% versus the current price.
Average Target
$72.25
0 analysts
Implied Upside
+16.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$66 - $86
Analyst target range
The stock is covered by 16 analysts, with a consensus recommendation of 'Buy' (mean rating 2.0). The average target price is $72.25, implying an upside of +16.8% from the current price of $61.85. The distribution includes 10 Buy ratings, 5 Hold ratings, and 1 Sell rating, reflecting a generally bullish sentiment. The target range spans from a low of $66.00 to a high of $86.00, with the high target suggesting a potential upside of +39.0% if the company achieves stronger-than-expected growth or multiple expansion. The low target implies a +6.7% upside, indicating that even the most bearish analyst sees limited downside. Recent ratings have been stable, with no major upgrades or downgrades in the past few months, suggesting conviction in the stock's outlook.
Bulls vs Bears: FR Investment Factors
First Industrial Realty Trust presents a mixed picture: strong revenue growth, robust profitability, and a bullish analyst consensus are countered by a high valuation, negative PEG, and earnings quality issues. The bull case is supported by solid fundamentals and a favorable industrial real estate outlook, while the bear case hinges on valuation risk and potential earnings normalization. Currently, the bull case has stronger evidence given the company's growth trajectory and analyst confidence, but the key tension is whether the market will continue to pay a premium for this growth in a rising rate environment. If interest rates stabilize or decline, the stock could re-rate higher; if rates rise, the high multiple could compress.
Bullish
- Strong Revenue Growth: Revenue grew 9.92% YoY in Q1 2026 to $194.83M, with sequential increases from $181.43M in Q3 2025 to $188.41M in Q4 2025, indicating accelerating momentum. This growth is driven by strong demand for industrial real estate, particularly from e-commerce and logistics tenants.
- Robust Profitability: Q1 2026 net income surged to $143.10M from $48.07M a year ago, with a net margin of 73.45% (boosted by property sale gains). Operating margin was 34.98% and EBITDA reached $227.35M, reflecting strong operational efficiency and asset management.
- Analyst Consensus Buy: With 16 analysts covering, the consensus is 'Buy' (mean rating 2.0), and the average target price of $72.25 implies +16.8% upside from the current price of $61.85. The high target of $86.00 suggests +39.0% potential, indicating significant optimism.
- Solid Balance Sheet: Debt-to-equity is 0.96, moderate for a REIT, and the current ratio of 1.14 indicates adequate liquidity. Q1 2026 operating cash flow of $88.91M comfortably covers the $60.38M dividend, with a payout ratio of 93.4% of FFO.
Bearish
- High Valuation: Trailing PE is 30.63x and forward PE is 33.20x, which is elevated compared to the broader market and historical averages. The PS ratio of 10.43x and PB ratio of 2.84x are also premium, suggesting the market is pricing in high growth expectations.
- Negative PEG Ratio: The PEG ratio is -2.22, indicating that earnings growth is expected to be negative. This is a red flag, as it suggests the high PE may not be justified by future earnings growth, potentially leading to multiple compression.
- Earnings Quality Concerns: Q1 2026 net income included significant gains on property sales (other income of $83.79M), inflating net margin to 73.45%. Excluding these gains, core profitability is lower, and the net margin is not sustainable, which could disappoint investors.
- Interest Rate Sensitivity: As a REIT, FR is sensitive to interest rates. With a beta of 1.044, it is slightly more volatile than the market. Rising rates could increase borrowing costs (interest expense was $25.35M in Q1) and reduce the attractiveness of the dividend yield.
FR Technical Analysis
The stock is in a broad uptrend, with a 1-year price change of +18.87%, and currently trades at $61.85, which is 88.5% of the 52-week range (low $50.24, high $69.88). This positioning near the upper end of the range suggests positive momentum, though it has retreated from the high, indicating some consolidation. The 52-week low of $50.24 provides a significant support level, while the high of $69.88 represents a resistance point that, if broken, could signal further upside.
Beta
1.04
1.04x market volatility
Max Drawdown
-10.5%
Largest decline past year
52-Week Range
$50-$70
Price range past year
Annual Return
+18.9%
Cumulative gain past year
| Period | FR Return | S&P 500 |
|---|---|---|
| 1m | -3.6% | -0.4% |
| 3m | +0.4% | +4.5% |
| 6m | +3.3% | +13.9% |
| 1y | +18.9% | +19.0% |
| ytd | +6.8% | +12.9% |
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FR Fundamental Analysis
Revenue has been growing steadily, with the most recent quarter (Q1 2026) reporting revenue of $194.83 million, a 9.92% year-over-year increase from $177.25 million in Q1 2025. This growth is part of a multi-quarter trend, with sequential increases from $188.41 million in Q4 2025 and $181.43 million in Q3 2025, indicating accelerating revenue momentum. The company's net income for Q1 2026 was $143.10 million, up from $48.07 million in the year-ago quarter, reflecting a net margin of 73.45% (due to gains on property sales), while gross margin was 21.08% (property-level NOI margin). Operating margin was 34.98%, and EBITDA reached $227.35 million, showing strong profitability. The balance sheet is moderately leveraged with a debt-to-equity ratio of 0.96, and the company generated $88.91 million in operating cash flow and $88.91 million in free cash flow in Q1 2026, sufficient to cover its $60.38 million dividend payment. ROE stands at 9.26%, and the current ratio is 1.14, indicating adequate liquidity.
Quarterly Revenue
$194827000.0B
2026-03
Revenue YoY Growth
+9.9%
YoY Comparison
Gross Margin
21.1%
Latest Quarter
Free Cash Flow
$482960000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
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Valuation Analysis: Is FR Overvalued?
Given positive net income, the PE ratio is the primary valuation metric. The trailing PE is 30.63x, while the forward PE is 33.20x, implying that earnings are expected to decline slightly, which is unusual and may reflect one-time gains in the trailing period. The stock trades at a premium to the sector, with a PS ratio of 10.43x and a PB ratio of 2.84x, compared to industry averages (not available from the data). Historically, the PE has ranged from roughly 11.9x to 57.3x over the past several years, with the current 30.6x near the middle of that range, suggesting the market is pricing in moderate growth expectations. The PEG ratio is negative (-2.22), indicating that earnings growth is expected to be negative, which may be a red flag.
PE
30.6x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 12x~39x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a moderate debt load (debt-to-equity 0.96) and interest expense of $25.35M in Q1, which could rise if rates increase. The payout ratio of 93.4% of FFO leaves little room for dividend growth or unexpected cash needs, and the reliance on property sale gains for net income (as seen in Q1) makes earnings volatile. Free cash flow of $88.91M in Q1 is positive but could be impacted by higher capital expenditures or tenant improvements.
FAQ
The key risks include: 1) Interest rate risk: As a REIT, FR is sensitive to rising rates, which can increase borrowing costs and reduce the attractiveness of the dividend yield. 2) Valuation risk: The stock trades at a high PE, and if earnings growth fails to materialize, the multiple could compress, leading to a price decline. 3) Economic risk: A recession could reduce demand for industrial space, leading to lower occupancy and rents. 4) Company-specific risk: The reliance on property sale gains for net income makes earnings volatile, and the high payout ratio limits financial flexibility. The most severe risk is a combination of rising rates and an economic downturn, which could push the stock down to its 52-week low of $50.24, a -18.8% decline.
The 12-month forecast for FR is positive, with a base case probability of 50% targeting a price range of $66-$72, aligning with the analyst average of $72.25. The bull case (30% probability) targets $72-$86, driven by strong growth and stable rates, while the bear case (20% probability) targets $50-$60, reflecting economic downturn and rate hikes. The most likely scenario is the base case, which assumes continued moderate growth and stable interest rates. Investors should monitor quarterly earnings and interest rate trends to gauge which scenario is unfolding.
FR is trading at a trailing PE of 30.63x and a forward PE of 33.20x, which is above the market average and its own historical median. The PS ratio of 10.43x and PB ratio of 2.84x are also elevated, indicating that the market is pricing in strong growth. The negative PEG ratio (-2.22) suggests that earnings growth is expected to be negative, which could make the stock overvalued. However, the analyst average target of $72.25 implies an upside, suggesting that analysts believe the stock is undervalued relative to its growth prospects. Overall, the stock appears fairly valued to slightly overvalued, but the growth potential may justify the premium.
FR is a good buy for investors seeking growth and income, given its strong revenue growth and analyst consensus Buy. The average target price of $72.25 implies a 16.8% upside, and the stock offers a 3.05% dividend yield. However, the high valuation (PE 30.6x) and negative PEG ratio suggest that investors are paying a premium, and any disappointment in earnings could lead to a sell-off. It is a good buy for those with a long-term horizon and tolerance for volatility, but not for short-term traders looking for quick gains.
FR is more suitable for long-term investment due to its growth trajectory and dividend income. The stock has a beta of 1.044, indicating moderate volatility, and its 1-year return of 18.87% shows potential for capital appreciation. However, the high valuation and sensitivity to interest rates make it less suitable for short-term trading, as price swings can be significant. A minimum holding period of 3-5 years is recommended to ride out market cycles and benefit from the company's growth and dividend compounding. Short-term traders may find opportunities, but they must be prepared for volatility.