Kimco Earns Credit Rating Upgrade, Boosts Shareholder Confidence

Kimco Realty KIM has received a meaningful boost after Moody’s Ratings upgraded its senior unsecured credit rating to A3 from Baa1, with a stable outlook. The move strengthens Kimco’s credit profile and positions it to access debt at more favorable rates, an advantage as the REIT continues to pursue redevelopment and growth projects.

Moody’s pointed to the consistency of Kimco’s grocery-anchored shopping-center portfolio, its solid same-property NOI performance and strong leasing spreads. The agency also highlighted Kimco’s disciplined balance sheet, including moderate leverage and strong liquidity, which together support the company’s ability to meet obligations while investing in its portfolio.

These strengths ultimately pushed the ratings, and Kimco is now set apart among REITs for belonging to a select cohort with A-level ratings from top agencies. This has bolstered investor confidence and will likely ease future borrowing.

KIM: Our Take

Kimco’s third-quarter 2025 results reveal a pro-rata portfolio occupancy improvement of 30 basis points sequentially to 95.7%, while small-shop occupancy reached a record high. The spread between leased and economic occupancy also widened, representing future rent growth from leases signed but not yet commenced.

Kimco’s concentration in first-ring suburban markets, particularly centers anchored by essential retailers, continues to generate steady traffic and dependable cash flows. Paired with healthy liquidity and conservative leverage, the company maintains the flexibility to pursue selective acquisitions and redevelopments. With operating fundamentals holding firm and financial capacity expanding, Kimco enters 2026 with a strengthened foundation and greater room to create value.

However, the market is witnessing a shift in retail shopping from brick-and-mortar stores to Internet sales. Particularly, the efforts of online retailers in recent years to go deeper into the grocery business have emerged as a concern for this retail REIT that focuses on building a premium portfolio of grocery-anchored shopping centers. Moreover, market uncertainties emanating from policy shifts and economic volatility remain major concerns.

While shares of this retail REIT, currently carrying a Zacks Rank #3 (Hold), have fallen 2% in the past six months, narrower than the industry’s decline of 3.2%, analysts seem bullish on this stock, with the Zacks Consensus Estimate for its 2025 FFO per share being revised marginally upward to $1.75 over the past month.

Stocks to Consider

Some better-ranked stocks from the retail REIT sector are Phillips Edison & Company, Inc. PECO and Curbline Properties Corp. CURB. Both Phillips Edison and Curbline Properties carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Phillips Edison’s 2025 FFO per share has been raised marginally over the past two months to $ 2.58 and calls for a 6.2% year-over-year increase.

The consensus estimate for Curbline Properties’ 2025 FFO per share has been revised upward marginally to $1.04 over the past two months and suggests a year-over-year increase of 31.7%.

Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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