In Mizuho Securities’ latest REITs Research Industry Flash for the multifamily REIT sector, the Tokyo-based investment analyst firm shares a mostly positive outlook for what this year should bring to major multifamily REIT players. There’s fair likelihood of “a continuation of multifamily’s outperformance,” Mizuho analysts say.
“The second quarter will be flavored by improved same store messaging. Most critical, in our view, may be clear evidence that a same store floor has formed, as we expect more universal 2017 guidance increases during the 2Q17 earnings season. We think investors need to see a change of direction (to the positive) to fully re-embrace multifamily, although some of that anticipation is already in the stocks,” the report reads.
Below are a few key findings presented by Mizuho for each of its selected REITs:
On Apartment Investment and Management Company: “Our price target approximates our NAV estimate. Should the company’s redevelopment platform experience further cost overruns and delays, our price target may not be achieved. We intend to align our rating and PT by the time the December quarter results are reported.”
Price as of June 7, 2017: $44.22
Rating: Neutral
Price Target: $45
Regarding AvalonBay Communities: “Our price target approximates a 10% premium to our NAV estimate. Should the company’s extensive development pipeline produce returns below current expectations, our price target may not be achieved.”
Price as of June 7, 2017: $194.74
Rating: Buy
Price Target: $210
About Camden Property Trust: “Our price target approximates our NAV estimate. Should CPT’s DC and Houston exposure weigh on growth to a degree greater than we expect, our price target may not be achieved.”
Price as of June 7, 2017: $86.30
Rating: Neutral
Price Target: $86
On Equity Residential: Our price target approximates our NAV estimate. If the company’s same store growth prospects decline in the face of increased competition from new supply, our price target may not be achieved.
Price as of June 7, 2017: $67.09
Rating: Neutral
Price Target: $67
In regards to Essex Property Trust: “Our price target approximates a 10% premium to our NAV estimate. Should the performance of its West Coast markets be negatively impacted by supply, primarily in Seattle and San Jose, our price target may not be achieved.”
Price as of June 7, 2017: $263.58
Rating: Buy
Price Target: $269
For Mid-America Apartment Communities: “Our price target approximates our NAV estimate. Should MAA’s secondary markets experience further job growth deceleration, our price target may not be achieved.”
Price as of June 7, 2017: $106.79
Rating: Neutral
Price Target: $99
About UDR, Inc.: “Our price target approximates a 10% premium to our NAV estimate. Should UDR experience revenue growth deceleration to a degree greater than our expectations, our price target may not be achieved.”
Price as of June 7, 2017: $39.99
Rating: Buy
Price Target: $42
