LXP Industrial Trust: A Double-Check of Credit Rating

LXP Industrial Trust, a Florida-based company founded in 1993, has been double-checked by a finance expert with experience at Bloomberg. The expert examines the company's financial instruments and credit rating, co-authored with Strategic Yield. The summary will focus on the principal points, ranging from 30 to 90 words.

LXP Industrial Trust, a Florida-based real estate investment trust (REIT) founded in 1993, has been subjected to a thorough financial analysis by a Bloomberg expert. The analysis, co-authored with Strategic Yield, provides a detailed examination of the company's financial instruments and credit rating. Key points from the analysis include:

1. Financial Health and Credit Rating: LXP Industrial Trust has a strong financial position with total assets of approximately $3.72 billion and a market capitalization of around $2.35 billion. The company is rated investment grade by Moody's (Baa2), Fitch (BBB), and S&P (BBB-). The analysis indicates a credit rating of Baa2, suggesting a stable financial environment.

2. Asset Quality and Tenant Profile: The company owns 116 properties, with 92% classified as Class A. Tenants include high-quality companies like Amazon, Nissan, and Black & Decker, with the top industries being "Consumer products" and "Transportation/Logistics." The asset coverage ratio is 247%, and the company earns about 9.66% gross on rentals.

3. Operational Efficiency: LXP's operating expenses, excluding depreciation and amortization, are approximately 28% of total revenue. The interest expenses are around 4.3% of the debt. The asset yield, after market adjustments, is 8.9%, and the market-adjusted asset coverage ratio decreases to 269%.

4. Dividend Yield and Shareholder Returns: LXP's common stock is trading at an $8.09 market price, with a dividend yield of 6.61%. The preferred stock, NYSE:LXP.PR.C, has a market price of $46.59 and a current yield of 6.98%. The company has maintained dividend payments for 32 consecutive years and raised them for the past 5 years.

5. Recent Financial Performance: In the second quarter of 2025, LXP reported earnings per share (EPS) of $0.09, surpassing the forecasted loss of $0.015. Revenue reached $86.74 million, exceeding the projected $83.92 million.

6. Valuation and Market Positioning: The forward price to FFO is 12.88, suggesting an expected future FFO yield of 7.76%. LXP's valuation metrics, including the price-to-book (P/B) ratio of 1.16, indicate potential overvaluation.

The analysis concludes that LXP Industrial Trust is a stable company with a strong presence in industrial real estate, supported by high-quality tenants and a robust financial position. However, the company faces challenges in leasing activities and valuation, which investors should consider.

References:
[1] https://www.investing.com/news/analyst-ratings/keybanc-reiterates-overweight-rating-on-lexington-realty-trust-stock-93CH-4170912
[2] https://seekingalpha.com/article/4811892-double-checking-credit-rating-lxp-industrial-trust
[3] https://www.tipranks.com/stocks/lxp/ai-stock-analysis?utm_medium=referral&utm_source=theglobeandmail.com