Market Overview

UPDATE: Morgan Stanley Initiates Coverage on American Homes 4 Rent on Compelling Growth Story, Fair Valuation

Share:
Related AMH
Benzinga's Top Upgrades, Downgrades For February 27, 2017
Benzinga's Top Upgrades, Downgrades For February 9, 2017
American Homes 4 Rent -1.5% on share sale (Seeking Alpha)

In a report published Monday, Morgan Stanley analyst Haendel E. St. Juste initiated coverage on American Homes 4 Rent (NYSE: AMH) with an Equal-Weight rating and $18.00 price target.

In the report, Morgan Stanley noted, “We believe in the single family rental (SFR) investment thesis and view AMH as a high quality operator that deserves a valuation premium. However, this premium is already appropriately reflected in the stock price, and peers like ARPI offer more favorable risk-reward. AMH is buying homes >25% below prior peaks and replacement cost. We expect 6% average annual HPA over the next five years in our base case. Net yields are in the mid-6%'s (pre cap-ex). To be clear, though, this is not a yield story in the near-term as cash flow will struggle to keep up with the pace of vacant home acquisitions. AMH is internally managed (we prefer internal over external) and enjoys a scale advantage over peers. Portfolio quality should also attract high quality tenants.”

American Homes 4 Rent closed on Friday at $16.02.

Latest Ratings for AMH

DateFirmActionFromTo
Feb 2017Credit SuisseInitiates Coverage OnNeutral
Feb 2017MizuhoInitiates Coverage OnNeutral
Oct 2016JMP SecuritiesInitiates Coverage OnOverweight

View More Analyst Ratings for AMH
View the Latest Analyst Ratings

Posted-In: Haendel E. St. Juste Morgan StanleyAnalyst Color Initiation Analyst Ratings

 

Related Articles (AMH)

View Comments and Join the Discussion!