"That risk mitigation has driven substantial value recently as multifamily investors have flocked to the stock, which is up 15 percent YTD and now trades at NAV vs. a 5-year average 10 percent discount," analyst Ryan Meliker said.
"While we expect the stock to continue to grind higher, we also don't expect any further relative multiple expansion, which should limit upside in a sector with decelerating fundamentals."
As such, the analyst reiterated his Hold rating, but raised his price target to $47 from $41.
The company's second-quarter pro forma FFO/share came in at $0.59, $0.02 ahead of consensus at $0.57. Same-store NOI up 4.1 percent, up from the analyst's forecast of +3.8 percent and guidance of 3.5–4.5 percent.
However, the company's updated 2016 guidance carried only $0.01 of the $0.02 beat through to the pro forma FFO midpoint, which now stands at $2.26–2.34 for 2016, the midpoint of which came in below both Canaccord's previous estimate and consensus of $2.30.
At time of writing, shares were down 1.45 percent at $45.39.
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