UPDATE: Morgan Stanley Initiates Coverage on American Residential Properties with Overweight Rating, $24 PT on Valuation

In a report published Tuesday, Morgan Stanley analyst Haendel E. St. Juste initiated coverage on

with an Overweight rating and $24.00 price target. In the report, Morgan Stanley noted, “At current valuation, we think ARPI offers a compelling opportunity to invest at a price that underappreciates future growth, home price appreciation (HPA), and platform value. Through further HPA and cash flow growth, we believe that ARPI's liquidation value could exceed the current stock price in less than a year, and we also expect the premium to underlying asset value to expand over time as ARPI proves its platform value and ability to lease-up homes and grow cash flow. As such, we are initiating with an Overweight rating and YE'14 price target of $24.” American Residential Properties closed on Monday at $19.55.