J.P. Morgan Reiterates Neutral Rating on AvalonBay (AVB)

J.P. Morgan is out with a research report this morning, where it reiterates its Neutral rating on AvalonBay Communities AVB; it has a $118.00 price target on the stock. The JPM analysts cited the company's most recent earnings results, noting that core portfolio results were largely in-line and reflect the strong improvement in apartment fundamentals being seen across the sector. Importantly, AVB provided 2011 FFO guidance that is ahead of estimates, driven by higher same-store NOI growth than it projected at its November investor day and the benefit of selling a leasehold asset that is apparently a drag on reported earnings. As for valuation, the analysts remarked, “AVB trades at 26.1 times our 2011 FFO estimate, a 22% premium to the multifamily group average, and 28.6 times our 2011 adjusted FFO (AFFO) estimate, a 10.4% premium to its peer group.”