Market Overview

4 Reasons This Analyst Stepped To The Sidelines On Mid-America Apartment Communities

Share:
4 Reasons This Analyst Stepped To The Sidelines On Mid-America Apartment Communities
Related MAA
Benzinga's Top Upgrades, Downgrades For May 31, 2018
DA Davidson Identifies Banks, REITS That Could Benefit From Amazon's HQ2

For Mid-America Apartment Communities Inc (NYSE: MAA), a multifamily REIT with roughly 100,000 apartment units and a small development platform, the multiple concerns moving forward outweigh the positives, according to Stifel.

The Analyst

Stifel's John Guinee downgraded Mid-America Apartment Communities from Buy to Hold with an unchanged $100 price target.

The Thesis

The analyst's concerns outweigh the positives:

  • Few barriers for rival REITs to compete in Mid-America Apartment Communities' existing or future markets;
  • Increasing development and/or replacement costs;
  • Management's revised assumptions for its core portfolio operations to the downside are unlikely to reverse in the near term; and
  • The company's development platform isn't very active.

Investors looking for exposure to the REIT sector may want to consider instead multifamily platforms that boast strong development efforts or trading at a more attractive total enterprise value/unit versus Mid-America Apartment Communities' TEV/unit of $164,000.

Mid-America Apartment Communities' reported second-quarter results Wednesday, which unlike many of its peers didn't include an increase to the underlying drivers to funds from operations (FOO) growth, the analyst wrote.

Price Action

Shares of Mid-America Apartment Communities were trading around $101.67 Friday.

Related Links:

4 Reasons For BTIG's Bearish Turn On Empire State Realty Trust

Goldman Upgrades Macerich On Internal Growth, Valuation

Latest Ratings for MAA

DateFirmActionFromTo
Aug 2018Stifel NicolausDowngradesBuyHold
May 2018BTIG ResearchDowngradesBuyNeutral
Feb 2018Cantor FitzgeraldMaintainsOverweight

View More Analyst Ratings for MAA
View the Latest Analyst Ratings

Posted-In: Apartments John Guinee multifamilyAnalyst Color REIT Downgrades Analyst Ratings Real Estate Best of Benzinga

 

Related Articles (MAA)

View Comments and Join the Discussion!

This Week In Cryptocurrency: Goldman Blasts Cryptos, Square Reports Bitcoin Profit

Navigant Downgraded By William Blair On Lack Of 2019 Visibility