UPDATE: Morgan Stanley Initiates Coverage on AvalonBay Communities with Equal-Weight Rating, $138 PT as NAV is Under Pressure

In a report published Tuesday, Morgan Stanley analyst Haendel E. St. Juste initiated coverage on AvalonBay Communities AVB with an Equal-Weight rating and $138.00 price target. In the report, Morgan Stanley noted, “AVB is a ‘blue chip' that is inexpensive today on P/NAV (-13%) relative to historical P/NAV (+6%). Investors should own AVB for its top quality mgmt team, portfolio, and platform before it becomes expensive again, but we think they should wait. Multiple headwinds and a lack of positive catalysts will keep AVB range-bound for awhile. We want to own AVB when development value spreads are widening, construction costs are moderating, capital is getting cheaper, and apartment fundamentals are early in the cycle; today is the opposite.” AvalonBay Communities closed on Monday at $122.11.