UPDATE: MLV & Co. Upgrades American Campus Communities on Positive Outlook

In a report published Monday, MLV & Co. analyst Ryan Meliker upgraded American Campus Communities ACC from Hold to Buy, and raised the price target from $48.00 to $50.00.

In the report, MLV & Co. noted, “We are raising our rating on ACC to BUY from HOLD, driven by the fact that current valuations imply an expectation for leasing difficulties for the 2013/14 school year to persist into the 2014/15 school year. We believe that 2014/15 leasing data, fueled by soft comps and supply growth that is not as aggressive as feared, will come in above current expectations beginning in February. We expect this to lead ACC and the student housing group higher, as the stock is a bellwether for the group. Following the stock's recent underperformance, we believe the 2013/14 bad news is fully priced in, and we see stock price upside of almost 20% by year-end 2014. While we are not optimistic that 2013/14 leasing data will come in above expectations when the company reports 2Q results this week, we do believe there is more upside than downside risk heading into earnings, given where expectations are. However, the crux of this call is on 2014/15 results exceeding expectations, not on 2013/14 leasing results coming in above expectations.”

American Campus Communities closed on Friday at $41.91.