Wells Fargo Raises First Industrial Realty Price Target to $58 from $42

Wells Fargo raised the price target on First Industrial Realty (FR) to $58 from $42, maintaining an Equal Weight rating. The firm adjusted price targets in the industrial and cold storage REIT group, expecting conservative outlooks and Q1 beats to protect against negative estimate revisions. The length of leasing softness will be key for investors.

Wells Fargo has significantly increased its price target for First Industrial Realty (FR) to $58, up from $42, while maintaining an Equal Weight rating. This adjustment is part of a broader evaluation of the industrial and cold storage real estate investment trust (REIT) sector as the second quarter approaches [1]. The bank suggests that early conservative forecasts and strong first-quarter performances might shield these REITs from potential negative revisions in estimates. However, the duration of current leasing challenges remains a significant concern for investors.

The average one-year price target for First Industrial Realty, as per 14 analysts, stands at $55.14, with a high estimate of $63.00 and a low estimate of $51.00. This average target implies an upside of 11.56% from the current price of $49.43 [2]. The consensus brokerage recommendation from 18 firms is currently 2.3, indicating an "Outperform" status [2].

GuruFocus estimates the GF Value for First Industrial Realty to be $65.24 in one year, suggesting an upside of 31.98% from the current price of $49.43. The GF Value is calculated based on historical multiples and future performance estimates [2].

First Industrial Realty reported a strong start to 2025 with successful leasing objectives and attractive new investments. The company renewed its line of credit and a $200 million term loan, extending debt maturities and enhancing financial stability. In-service occupancy was 95.3% at the end of the first quarter, aligning with expectations and demonstrating strong portfolio performance. The company achieved a 30% cash rental rate increase for new and renewal leasing, excluding a large fixed-rate renewal. Development projects include a 176,000 square-foot facility in Dallas and a 226,000 square-foot facility in Philadelphia [1].

However, the evolving landscape surrounding tariffs poses uncertainty, potentially impacting business activity and leasing decisions. Vacancy rates in some submarkets, such as Denver, have been higher than desired, indicating potential challenges in those areas. The company faces potential risks from geopolitical and economic uncertainties, which could affect tenant demand and investment decisions. There is also a concern about the impact of tariffs on tenant demand, particularly for international trade-related tenants [1].

The company has a significant amount of speculative development, which could pose risks if leasing activity slows down. Bank of New York Mellon Corp decreased its position in First Industrial Realty by 0.8% during the first quarter, while several other institutional investors and hedge funds have increased their stakes in the company [2].

Wells Fargo's price target increase reflects optimism about the company's performance and the broader industrial REIT sector. However, investors should remain vigilant about potential risks, such as leasing challenges and geopolitical uncertainties.

References:
[1] https://www.gurufocus.com/news/2973624/first-industrial-realty-fr-sees-price-target-boost-by-wells-fargo-fr-stock-news?mobile=true
[2] https://www.marketbeat.com/instant-alerts/filing-bank-of-new-york-mellon-corp-decreases-position-in-first-industrial-realty-trust-inc-nysefr-2025-07-12/