Agree Realty (ADC) Stock Forecast & Price Target

Agree Realty Corporation demonstrates a strong financial foundation with 68% of its rental income sourced from investment-grade-rated tenants, a figure that has increased by approximately 10% following substantial deployment of $7 billion over the past five years. The company has also enhanced its capital position since the end of 1Q25 and possesses robust liquidity that supports ongoing deal flow into the future. Furthermore, recent strategic hires within the investment team have led to a consistent deal flow, bolstering an increased investment guidance for the year, projected at $1.4 billion at the midpoint.

The key points supporting a negative outlook on Agree Realty Corporation's stock include the projected credit loss guidance of 50 basis points for the year, with 30 basis points already realized in the first quarter, indicating potential challenges in revenue stability. Additionally, rising interest rates are expected to adversely impact the cost of capital, which could significantly reduce the company's earnings potential tied to capital deployment, a vital aspect for net-lease REITs. Furthermore, competition from institutional and private investors in the investment sales markets may keep asset pricing elevated, while economic and medical issues pose risks to tenants' ability to meet their rent obligations, further complicating the company's financial outlook.