Wall Street sees a bright 2026 for this beat-up dividend-paying stock

The real estate sector is limping out of 2025, but Wall Street analysts spot an overlooked opportunity for the new year: Federal Realty Investment Trust . While the S & P 500 is on track for a 17% jump in 2025, the real estate sector within the broad market index is on pace to end the year flat. Investors have largely shied away from that corner of the market, flocking instead toward high flying tech and communication services plays. But analysts see some potential in 2026 for the likes of Federal Realty, even as it’s on pace for a nearly 10% slide this year. The stock has a dividend yield of about 4.5%, and in August the company announced its 58 th consecutive year of dividend hikes. FRT YTD mountain Federal Realty in 2025 Capital recycling Jefferies analyst Linda Tsai named Federal Realty a top idea in 2026, lifting her rating on the name to buy. Her price target of $115 suggests roughly 13% in upside from Tuesday’s close. “Disciplined geographic expansion with attractive returns, active capital recycling and strong liquidity, and upside from leasing and redevelopment are key reasons to like FRT in 2026,” Tsai wrote in a Dec. 15 report. The company’s capital recycling strategy entails selling long-held and mature retail assets and investing the proceeds into high-quality growth opportunities. To that effect, Federal Realty announced on Dec. 17 the sale of a residential building in North Bethesda, Md. and a grocery-anchored shopping center in Bristol, Conn. for a total of about $170 million. Attractive opportunities that Federal Realty has snapped up recently include its $153.3 million purchase of Village Pointe in Omaha, Nebraska, a property whose tenants include consumer tech giant Apple, luxury handbag designer Coach and skin care retailer Sephora. Ladenburg Thalmann analyst Floris van Dijkum said in a Dec. 2 report that the Omaha deal was the “right asset, new market.” “The latest asset has strong demographics with average household incomes of $182,000 within a three-mile radius and solid traffic with approximately 6 million annual visitors,” he said, adding the firm’s team continues to “find attractive value in FRT shares.” Ladenburg maintained its buy rating on the stock and reiterated its price target of $115 per share. Attractive valuation JPMorgan analyst Anthony Paolone lifted his rating on Federal Realty to overweight from neutral, also pointing to the company’s move toward snapping up shopping centers in high income and high growth markets. He lifted his price target to $114 per share from $107, suggesting roughly 12% upside. Paolone also noted that the stock had a relatively attractive valuation compared to the overall real estate investment trust industry. “On a [funds from operations] basis, FRT shares trade at 13.8x our 2026 estimate, a premium to its strip center peers at 12.8x but a discount compared to the overall REIT group of 17.6x,” he said. The analyst said that past concerns about the company’s drift in strategy, as well as a guidance shortfall earlier in the year helped derate the stock. However, “given the good traction with acquisitions and improving FFO/share growth rate in 26, our take is that this could translate into better near-term relative stock performance,” he said. Federal Realty is roundly liked on Wall Street, with 12 out of 19 analysts rating it a buy, per LSEG. Consensus price targets call for roughly 9% upside from current levels.