Mizuho has refreshed its conviction list of preferred real estate investment trusts (REITs) for the latter half of 2026, spotlighting two names that have demonstrated resilient earnings momentum in a shifting rate environment. The bank's analysts point to Cousins Properties (CUZ) and Phillips Edison & Company (PECO) as standout opportunities across commercial property subsectors.
Both companies delivered second-quarter results that surpassed Wall Street estimates, prompting management to raise full-year profit guidance. Mizuho's price targets imply meaningful upside from current levels, underpinned by strong operational execution and favorable market tailwinds for real estate equities, which have outperformed the broader market this year.
Cousins Properties: Sunbelt office rebound
Analyst Vikram Malhotra maintains a $33 price target on Cousins Properties, suggesting roughly 12% upside from recent trading levels, on top of substantial year-to-date gains. The Atlanta-based REIT manages about 20 million square feet of office space across high-growth Sunbelt hubs such as Austin, Dallas, and Charlotte.
In the second quarter, Cousins reported funds from operations (FFO) of 75 cents per share on revenue of $268.5 million, beating consensus estimates of 74 cents and $263.5 million. Management lifted the lower end of its full-year guidance, citing leasing momentum, cash rent spreads up approximately 12% in the first half, and a 1-million-square-foot pipeline. The company's balance sheet capacity supports opportunistic acquisitions, while the stock offers a dividend yield of 4.31%.
Wall Street broadly agrees with Mizuho's view, as the consensus rating on CUZ is Buy, with price targets reaching as high as $35.
Phillips Edison: Grocery-anchored resilience
Phillips Edison rests on a necessity-based retail thesis: grocery-anchored centers tend to hold demand through economic cycles. Analyst Haendel St. Juste has a $43 price target, implying about 7% upside on top of a nearly 14% rally since the start of the year.
PECO's portfolio spans roughly 330 shopping centers anchored by grocers like Kroger and Publix, with occupancy near the sector-leading 97.5%. In the second quarter, core FFO reached 69 cents per share on $189.6 million in revenue, beating estimates of 68 cents and $187.5 million, prompting management to raise full-year guidance.
St. Juste expects above-average FFO growth through 2027, driven by acquisitions and limited new supply, with minimal watchlist tenant exposure. Any tenant bankruptcies would offer opportunities to re-let space at higher rents. PECO shares currently pay a 3.2% dividend yield, and the broader analyst community rates the REIT at Overweight, with a consensus price target of $46.
For investors seeking exposure to real estate income, these two picks highlight the value of operational strength and strategic positioning. As always, other data-driven REIT selections may also merit attention. Meanwhile, broader market dynamics, such as institutional positioning in tech giants, continue to influence capital flows.
This article is for informational purposes only and does not constitute financial advice.
