UPDATE: Bank of America Upgrades Douglas Emmett to Buy on Improved Market View
Bank of America increases its rating on Douglas Emmett (NYSE: DEI) and raises its price objective from $24.50 to $26.
Bank of America notes, "DEI wants to acquire high quality in its current markets, meaning earnings growth from acquisitions is unlikely due to pricing. Earnings growth will likely require same store NOI growth. We stayed Neutral on DEI despite its asset and management quality, waiting for occupancy and rent growth to arrive in its submarkets. Broker and NAREIT discussions, confirmed by two days on the road with DEI management this past week, suggest such improvement. We recognize DEI will face its sharpest negative leasing spreads through 2Q13 as leases signed at the peak roll. However, portfolio rent bumps and occupancy growth should offset the downside pressure on same store; rent comps become much easier in 2H13/'14."
DEI closed at $23.38 on Monday.
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