AVB - AvalonBay: Encouraging Rent Trends Make Shares Attractive

2024-05-02 07:12:30 ET

Summary

• AvalonBay Communities' shares have underperformed due to higher rates and a slowdown in the rental market.
• The company's Q1 results exceeded expectations, as rental trends improved in the Northeast and Seattle, with even the Bay Area stabilizing.
• AVB is well-positioned for mid-single digit growth this year, with momentum in key markets and a strong pipeline of new projects that are renting at higher rates.

Shares of AvalonBay Communities ( AVB ) have been an underperformer over the past year, rising 4% as higher rates have weighed on real estate valuations and the rental market has slowed. Back in October , I rated shares a “buy,” given my view it could deliver long-term double-digit returns. In the past six months, it has returned 8%, consistent with this expectation, though the market has rallied an even stronger 16%. Given solid Q1 results, I continue to view shares favorably....

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