BB&T Capital Markets
Rating: Buy (2/16/07) Target price: $61
EGP’s valuation appears mixed. At the asset level, EGP trades at an 11 percent premium to our revised estimate of NAV, which is a 620 bps premium to its industrial REIT peers but a 260 bps discount to the REIT industry. Based on our 2007 FFO per share estimate, EGP trades at a 7.0 percent premium to its industrial peers but at a 7.3 percent discount to the industry. We believe EastGroup’s uncomplicated corporate structure enables it to trade at a simplicity premium to its industrial peers. However, with projected FFO per share growth of 10 percent in 2008, which is more than comparable to the industry, we see no reason for EGP’s discount relative to the average REIT (other than perhaps EGP’s smaller market cap).

BMO Capital Markets Corp.
Rating: Market Perform (2/16/07) Target price: $59
EGP trades at 22.8 times our revised 2007 AFFO per share estimate, slightly above the peer average of 22, a valuation we consider reasonable given expectations of high, single-digit, near-term growth. Assuming a flat multiple and 7 percent AFFO per share growth from 2007 to 2008 implies our revised $59 price target (up from $55). If returns on EGP’s development pipeline do not meet expectations, then our price target may not be achieved. We’re maintaining our MARKET PERFORM rating, but would buy on weakness.

Wachovia Capital Markets LLC
Rating: Outperform (2/16/07) Target price: $62
With an increasingly competitive, bulk-warehouse development market domestically (marginal yields compressing), it is our view EGP’s differentiated focus on shallow-bay, regional distribution (smaller) assets will result in less return-diminution than that which is already occurring in its public peers. Furthermore, with an annual completion pace of $75 million to $85 million, EGP’s current land holdings offer 3 to 4 years of development potential, which is a longer pipeline duration, and thereby, likely greater development-margin resiliency than its public peers.