Barlow’s Research Roundup: RBC analyst sees attractive entry point for these REITs

Daily roundup of research and analysis from JOBFlocks’s market strategist Scott Barlow

Entry point for REITs

RBC Capital Markets analyst Pammi Bir surveyed the REIT sector,

“Q2/26 was certainly not a “run-of-the-mill” REIT earnings season. Despite a largely in line quarter, results in multiple cases took backseats to takeouts and potential prospects thereof, particularly amid ongoing strategic reviews. Still, looking at underlying results, our constructive views on our preferred subsectors were reinforced, particularly seniors housing where our earnings and NAV estimates increased the most. Encouraging momentum in industrial also seems to be building, while retail remains operationally resilient. The run-up in bond yields in recent weeks has taken a toll on the sector. From our vantage point, we see attractive entry points on several of our top picks including CSH, DIR, EXE, GRT, KMP, PMZ, REI, and SVI. Results in line; seniors housing still out front by a mile. Q2 sector average FFOPU growth was 2 per cent year-over-year, in line with our forecast and down from last quarter’s 4-per-cent pace. Seniors housing extended its run of leadership to 12 straight quarters with 30 per cent year-over-year growth outpacing all other subsectors by a significant margin. Self-storage (up 8 per cent year-over-year) held on to second place, followed by steady underlying growth from industrial (up 2 per cent), diversified (up 2 per cent), and retail (up 2 per cent)” .

GDP report

BMO senior economist Shelly Kaushik previewed the domestic GDP result released this Friday,

“June was a decent month for Canadian economic activity, helping build momentum for what’s shaping up to be a solid second quarter in Friday’s GDP report. One of the last pieces of the puzzle was last week’s retail sales report, which showed volumes rising for a second straight month. As the chart illustrates, spending volumes per capita have been on an upswing for the past two quarters as the population shrinks for the first time on record. Along with firm manufacturing and wholesale trade volumes, this should mean real GDP likely came in a bit firmer than StatCan’s 0.2 per cent flash estimate for June. The bigger question is what happens in July, as both the retail and manufacturing flashes pointed to small negatives while higher prices suggest volumes could come in softer. On the plus side, hours worked took a big step up in the month. Clearly, consumers and businesses were shifting away from focusing on tariff uncertainty before the trade war reignited in July. The new duties, and threats for more, will test their resolve as we look to the second half of the year”

Large cap value

BofA Securities equity and quant strategist Savita Subramanian recommended that clients get off the momentum rollercoaster and buy large cap value,

“Momentum investors have had a roller coaster 2026, with a record 36.0 per cent 1H rally (+4σ), a July rout (-4σ) marking momentum’s 2nd worst month in 40 years, worsted only by April 2009, then an August rally. Momentum is now ahead of the benchmark by about 10ppt YTD. But historically, when 6-mo. Momentum returns were as strong as in 1H (>95th percentile), MO has lagged by almost 10ppt over the subsequent 6 mos., lagging roughly 9 out of 10 times, whereas Value strategies have fared better. Which brings us to… Stick with large cap value until everyone’s talking about it We wrote this in mid-2021 and since then Large Cap Value (LCV) has remained stubbornly under the radar -we get far more incoming questions on large growth stocks and small caps. Despite what feels like a mega-cap growth dominated market, LCV has placed #1 or #2 of four size/style categories since year-end 2021, 2023, 2024, 2025”

Ms. Subramanian screened the U.S. stock universe for companies with positive three month price momentum, above average earnings revisions, and earnings yield above the index average. These include Agilent Technologies Inc. Airbnb Inc., Automatic Data Processing Inc., Becton, Dickinson Company, Chubb Limited, Salesforce Inc., Datadog Inc., Dollar General Corporation, Estee Lauder Companies Inc., Hormel Foods Corporation, International Flavors & Fragrances Inc., Kraft Heinz Company, Microsoft Corporation, Micron Technology Inc. Paychex, Inc. Progressive Corporation, Sandisk Corporation, Stanley Black & Decker Inc., Thermo Fisher Scientific Inc. and United Airlines Holdings Inc.

Bluesky post of the day

Diversion

“The Robots Beat Usain Bolt, Then Met Their Match: Beans” - Gizmodo