W.P. Carey: Updated Model w/ Higher AFFO Estimates, PT > $78

Research evidence excerpt

W.P. Carey: Updated Model w/ Higher AFFO Estimates, PT > $78

Anthony Paolone, CFA AC North America Equity Research

(1-212) 622-6682 25 June 2026 J P M O R G A N

anthony.paolone@jpmorgan.com

W.P. Carey (Overweight; Price Target: $78.00)

Investment Thesis

We rate WPC Overweight. We think the company has a well-diversified net lease portfolio

in terms of asset types and geography with above-average internal growth through higher

exposure to CPI-based leases and industrial assets that carry higher rent bumps. Its spin-off

and sale of office assets resulted in a better asset mix, in our view, and its exposure to Europe

provides it with a larger “buy box” relative to peers – as well as lower borrowing rates. We

think the company’s ability to tap internal capital sources (LINE position, payback on loans

it extended, operating asset sales) makes it a little less reliant on capital markets than some

peers. Tenant credit should remain a focal point, but we think the picture is stable on this

front. Further, with attractive capital costs, its investments are solidly accretive to earnings,

and its investment pipeline is strong.

Valuation

WPC trades at 13.8x our 2026 WPC-defined AFFO estimate versus the net lease REIT peer

group average of 13.1x. Excluding the impact of leverage, we calculate that WPC trades at

16.6x EV/EBITDA versus the net lease REIT average of 16.0x. Its 5.2% dividend yield is

slightly below the net lease peer average of 5.7%. Finally, at the current stock price, we

calculate that its implied cap rate is 6.4%.

We are revising our December 2026 price target to $78/share (up from $77/share), which

is based on a DCF model. For “cash flow,” we use dividends derived from our earnings

model through 2031, thereafter assuming a long-term AFFO growth rate of 3.25%