Our applied valuation premium reflects ADC’s attractive positioning in regard to asset quality (high essential tenancy and limited at-risk exposure), ramping acquisition pipeline driving compelling earnings growth off of a smaller portfolio, balance sheet positioning, pre-funding, and cost of capital advantage, which should help fuel future growth. Our $77 target price represents a ~18x multiple on 2025E earnings.

We see downside risk to our target price should fundamentals weaken and spread investment opportunities diminish. We see upside risk should fundamentals strengthen and spread investment opportunities expand.