UDR - Real Estate REITs Pressured Amid Higher Interest Rate & Supply Woes But Analyst Upgrades AvalonBay Communities: Here's Why | Benzinga

Piper Sandler analyst Alexander Goldfarb revised ratings on several real estate REITs amid higher interest rates environment and increased supply pressures scenario.

The analyst upgraded AvalonBay Communities Inc (NYSE: AVB) to Overweight from Neutral at a lowered price target of $194 (from $197).

The analyst is bullish on AVB as its developments, underwritten during COVID and >7% yields drive its earnings. Also, AVB's market-affordable rents provide insulation to competitive supply, says the analyst.

The analyst cut estimates for FFO by $0.12 to $10.42 (vs. NAREIT guidance of $10.34 - $10.44) for FY23, while raised by $0.23 to $11.17 for FY24 and $0.40 to $11.78 for FY25. 

The analyst raised Q4 FFO to $2.73 from $2.72 (vs. the company's guidance of $2.65-$2.75), reflecting Q3 results, $150 million repayment of floating rate debt, and assuming healthy fundamentals and above-average delivery yields. 

Goldfarb downgraded Mid-America Apartment Communities Inc (NYSE: MAA) to Neutral from Overweight at a reduced Full story available on Benzinga.com