The Buy Thesis
CBL & Associates (CBL) trades at a substantially lower multiple, relative to peers, than it should. There are two aspects in particular that we believe the market is mispricing.
- J.C. Penney's (JCP) contracts with CBL are at risk and viewed as a net loss, but are actually an opportunity.
- CBL's valuation is being overly punished for the age of their properties.
We view each of these as a positive catalyst going forward as the correction of the market's perception would lead to multiple expansion. Let us examine each catalyst in more detail.
Catalyst #1: Turmoil at JCP
There is a fair amount of debate about the future of JCP and its implications reach...