American Campus Communities Is Set To Gain Market Share, BofA Says In Upgrade

American Campus Communities, Inc. ACC is poised to gain market share within the "defensive" REIT space, according to Bank of America Merrill Lynch. 

The Analyst

Analyst Juan Sanabria upgraded American Campus Communities from Neutral to Buy with a price target lifted from $43 to $46.50.

The Thesis

The overall real estate cycle continues to mature, but student housing stands out within the REIT group given a "significant" amount of capital inflows, especially from overseas sources, Sanabria said in the upgrade note.

American Campus is uniquely positioned to benefit from favorable industry dynamics, as schools are more likely to do business with the company since it's a "perpetual life vehicle" versus a "private, finite life fund," the analyst said. 

If rival Education Realty Trust, Inc. EDR accepts a transaction to go private, then American Campus would be better positioned to increase its market share of on-campus transactions with universities, according to BofA. 

American Campus' recent joint venture with Allianz could prove to be an attractive and new source of capital that could finance higher-growth development opportunities, the analyst said. 

Price Action

Shares of American Campus Communities were trading higher by more than 1 percent at the time of publication Thursday. 

Related Links:

Goldman Sachs Cites Unfavorable Macro Trends In Education Realty Trust Downgrade

Stifel: Geopolitical Uncertainty, Interest In Hard Assets Are Positives For REITs