UPDATE: Imperial Capital Initiates Sun Communities at Outperform on Multiple Positive Factors
In a report published Friday, Imperial Capital analyst David Harris initiated coverage on Sun Communities (NYSE: SUI) with an Outperform rating and $54.00 price target.
In the report, Imperial Capital noted, “We are initiating coverage of SUI common stock with an Outperform rating and a one-year price target of $52. Achieving our target, together with receipt of the current dividend, would generate a potential 13% total return over 12 months, which is at the upper end of our sector expectations. SUI is one of the largest public owners of manufactured home (MH) and recreational vehicles (RV) sites. We regard MH/RV as being one of the most stable of all property types. New supply is limited and demand is driven by the need for shelter. MH represents an attractive residential option to an aging population and to some low-mid income families. The improvement of home prices in many markets across the country should help facilitate the sales of family homes and downshift to MH communities/RV lifestyle. Over the last year or so, SUI has increased the pace of acquisitions, rebranded its RV business, and actively raised new capital. After several years of no change in the common dividend, we look forward to some increase in the level of distribution. SUI has posted positive performance over the LTM period (+14%) and has outperformed the REIT sector over the same time, as measured by SNL U.S. Equity REITs (+9%). We believe there is scope for future outperformance among residential REIT stocks and that SUI offers an attractive option alongside selected apartment names. We believe the recent pull-back could represent an attractive entry point.”
Sun Communities closed on Thursday at $49.96.
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