Wunderlich Securities Lowers Estimates On Revised Capital Funding Assumptions For Preferred Apartment Communities

In a report published Wednesday, Wunderlich Securities analyst Craig Kucera reiterated a Buy rating and $11.00 price target on

. In the report, Wunderlich Securities noted, "We maintain our Buy rating and $11 target on Preferred Apartment Communities (APTS) but are lowering our 2015 earnings estimates due to management's expectation to modestly delever the balance sheet in 2015 via equity issuances (both common and preferred). APTS' multifamily asset performance remained robust (+6.6% SS NOI) while management integrated a significant amount of multifamily and retail properties into the portfolio in 4Q14, increasing revenue 52% sequentially. With a steady source of lower-cost capital, APTS should be able to convert more of its balance sheet into cash-flowing real estate, driving a better valuation in the stock, particularly as a number of mezzanine loans are likely to convert into assets over the next 12 months with an attractive cost basis relative to market." Preferred Apartment Communities closed on Tuesday at $10.38.