Ahead of the Bell: Analyst lowers Tanger rating

Tanger Factory Outlet Centers Inc. is better positioned than other retailers during the recession, but its stock price is too high, an analyst said Monday as he downgraded the company.

Michael Bilerman of Citi Investment Research said Tanger's outlet centers are appealing to shoppers trying to save money during the current economic downturn. The real estate investment trust develops, owns, and manages some 30 retail outlet centers in 21 states.

Consumers have continued to pull back on spending as anxiety grows about the prolonged housing slowdown, eroding credit, rising food costs and unemployment concerns. Many have changed their discretionary spending ways by turning to outlet centers and other discount retailers to make many of their purchases.

"(Tanger's) outlet center portfolio should perform well through the recession as consumers continue to target value," the analyst wrote in a client note.

Bilerman said Tanger's outlet approach puts it in a strong position when compared with other retailers. The analyst also likes the Greensboro, N.C.-based company's low risk balance sheet and its conservative development approach.

But Tanger's stock price is too high relative to its shopping center and mall peers, Bilerman said.

The analyst lowered the company's rating to "Hold" from "Buy."