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UPDATE: Morgan Stanley Reiterates on American Homes 4 Rent on Relative Valuation

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March 14, 2014 10:05 am
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In a report published Friday, Morgan Stanley analyst Haendel E. St. Juste reiterated an Equal-Weight rating on American Homes 4 Rent (NYSE: AMH), but removed the $18.00 price target.

In the report, Morgan Stanley noted, “While AMH grew its portfolio slightly more than we expected in 4Q13 (which we already knew after it was reported at a conference last week), the market will likely be disappointed by a decline in stabilized occupancy (though note that we saw the same thing from peer ARPI). For now, though, all eyes are still on securitization, as this will likely fund the next leg of growth for AMH before it needs to go to the equity markets. AMH reported that it expects a securitization to be completed in the next 60 days, putting a timeline on a deal for the first time, and demonstrating a level of confidence that a deal is close to being complete.

“We continue to think risk-reward remains highly compelling for the Single Family Rental sector overall, but remain Equal-weight AMH on relative valuation.”

American Homes 4 Rent closed on Thursday at $17.00.

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