UPDATE: Wunderlich Securities Reiterates On Armada Hoffler Properties Inc On Declining Estimates

In a report published Monday, Wunderlich Securities analyst Craig Kucera reiterated a Buy rating on
Armada Hoffler Properties Inc
AHH
, but lowered the price target from $11.50 to $11.00. In the report, Wunderlich Securities noted, “We are lowering our price target from $11.50 to $11 following Armada's (AHH) 5.75mm share overnight offering; however, we look at the transaction as necessary for AHH to delever and to allow for future development spending and growth. Our FY14 FFO estimates are declining from $0.83 to $0.80 and FY15 from $0.94 to $0.83, as the use of proceeds is anticipated to repay the line of credit, and our NAV is declining from $11.90 to $11.34 (7.5% cap rate). We continue to see AHH's central value creation coming from the wholesale/retail spread on class-A development that should yield 8.25% vs. <7% acquisition cap rates. Our price target of $11 is 97% of our NAV estimate and represents a 5x/4x 2015 FFO/AFFO discount to diversified REIT peers.” Armada Hoffler Properties Inc closed on Friday at $9.47.
Posted In: Craig KuceraWunderlich SecuritiesAnalyst ColorPrice TargetAnalyst Ratings