Real Estate REITs Pressured Amid Higher Interest Rate & Supply Woes, But Analyst Upgrades AvalonBay Communities: Here's Why
Portfolio Pulse from Lekha Gupta
Piper Sandler analyst Alexander Goldfarb revised ratings on several real estate REITs amid higher interest rates and increased supply pressures. AvalonBay Communities Inc (AVB) was upgraded to Overweight from Neutral with a lowered price target of $194. Mid-America Apartment Communities Inc (MAA) was downgraded to Neutral from Overweight with a reduced price target of $130. Camden Property Trust (CPT) was downgraded to Underweight from Neutral with a price target cut to $80. UDR Inc (UDR) was also downgraded to Underweight from Neutral with a decreased price target of $30.

October 31, 2023 | 6:38 pm
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POSITIVE IMPACT
AvalonBay Communities Inc was upgraded to Overweight from Neutral with a lowered price target of $194.
The upgrade is due to the company's developments, underwritten during COVID and >7% yields driving its earnings. The market-affordable rents provide insulation to competitive supply.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Camden Property Trust was downgraded to Underweight from Neutral with a price target cut to $80.
The downgrade is due to the expected further earnings pressure from bad debt and competitive supply lease-ups.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
Mid-America Apartment Communities Inc was downgraded to Neutral from Overweight with a reduced price target of $130.
The downgrade is due to the supply pressure having a longer-than-expected impact, weighing on new rents.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100
NEGATIVE IMPACT
UDR Inc was downgraded to Underweight from Neutral with a decreased price target of $30.
The downgrade is due to the expected further earnings pressure from bad debt and competitive supply lease-ups.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100