UPDATE: Citi Upgrading Colonial Properties Trust (CLP)

Citi Investment Research is upgrading shares of Colonial Properties Trust CLP to Buy from Hold and is raising its price target to $22 from $20. In a note to investors, Citi writes, "We are upgrading CLP to Buy from Hold, as recent underperformance has opened up an opportunity to purchase CLP at an attractive discount. At a 7.4% implied cap, CLP's current valuation stands in contrast not only to its historical valuation relative to peers (15-20% discount vs 28% today), but also to where comparable MF assets would likely trade in the private market (5.5-6.5%). In spite of the discount, CLP's SSNOI growth prospects are among the best of its peers (could deliver 6-7% SSNOI in ‘11). While the sector's valuation remains elevated, CLP is one of the few within apartments that could see meaningful multiple expansion as a number of catalysts unfold over the next year (discussed below). The possibility of strong growth and multiple expansion makes CLP a compelling investment opportunity, and with CLP up ~1% ytd versus ~9% less than a month ago (in spite of strengthening fundamentals), we believe now is an opportune time to buy. TP to $22 from $20." Shares of CLP gained 5 cents yesterday to close at $18.30, a gain of 0.27%.