CLPR - Clipper Realty raised to Outperform at RayJay as value 'too attractive to ignore'
2023-06-05 08:50:18 ET
Clipper Realty ( NYSE: CLPR ) shares perked up 2.1% in Monday premarket trading after Raymond James analyst Buck Horne upgraded the multi-family residential REIT to Outperform from Market Perform on a too-attractive-to-ignore valuation.
Horne pointed out in a note that the stock traded at just ~13.5 times 2024 AFFO and at a 31% discount to his Street-low net asset value. SA's Quant system gave CLPR a Valuation Grade of "B," the some of the best marks in price-to-rental revenue and price-to-sales ratios.
Thanks to strong demand for multifamily housing demand in New York City and limited supply risk, the NAV gap should get closed over time, he contended.
The Brooklyn-based company's fundamentals are improving as its "flagship market-rate community (Tribeca House) continues to generate exceptionally strong pricing power on new leases at +17% during 1Q23," Horne said. "Recent indications on the next round of 2023 rent increases are also trending towards higher y/y increases, which could be a helpful catalyst starting in October."
The Outperform rating disagrees with the Quant rating of Strong Sell and converges with the average sell-side analyst rating of Buy.
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Clipper Realty raised to Outperform at RayJay as value 'too attractive to ignore'