Tanger Factory Outlet Centers (NYSE:SKT) was downgraded to Neutral from Buy at Goldman Sachs Wednesday, with analysts increasing the firm's price target on the stock by $1 to $26 per share.
The analysts told investors in a note that company initiatives are now priced into the stock after a more than 33% rally this year.
SKT shares are down 1.5% at the time of writing, trading at $24.21 per share.
With Tanger's FFO multiple expanding 74% over the last 12 months, Goldman Sachs believes the valuation shift reflects an "improved growth outlook" as a result of strong leasing interest, improved rental pricing, successful development lease-up, establishing an outparcel program, and other initiatives.
"Our 2024 FFO estimate is now 1.0% ahead of FactSet consensus, which we believe the market is already pricing in, as SKT's share price has significantly outperformed consensus estimate revisions and SKT's multiple is near the multiple to growth trend line across REITs," wrote the analysts.
"As a result, while we expect SKT's improved multiple can be sustained, further upside is limited, and we downgrade SKT to Neutral."