Analysts' views carry a great deal of weight on Wall Street. When an analyst upgrades or maintains a previous rating while increasing the price target of a stock, investors can expect to see the share price rise.
Analysts will often review a particular subsector and then increase price targets on more than one stock within a certain sector. Other times when one analyst boosts a rating on a stock, other analysts will soon follow suit.
Take a look at four real estate investment trusts (REITs) that recently received new price targets. Three are residential REITs and the fourth is an office REIT. Three of them have more than one analyst weighing in.
Equity Residential EQR is a Chicago-based REIT that owns or invests in 302 apartment communities with 80,191 units in 12 larger and more affluent cities, such as Boston, New York, Washington D.C., Seattle, San Francisco and Denver. Its February occupancy rate was 96.2%. Equity Residential has been a member of the S&P 500 since 2001.
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Equity Residential reported significant news within the past six weeks that has influenced analysts' assessment of where the share price should be.
On March 14, Equity Residential announced a quarterly dividend of $0.675 per share. This was a 2.3% increase from its previous quarterly dividend amount of $0.66 per share.
On April 22, BMO Capital Markets analyst John Kim upgraded Equity Residential from Market Perform to Outperform and raised the price target from $68 to $70.
On April 23, Equity Residential reported its first-quarter 2024 operating results. Funds from operations (FFO) of $0.93 per share beat the consensus estimate of $0.91 and improved from the $0.87 per share FFO in the first quarter of 2023. Revenue of $730.818 million beat the estimate of $726.227 million and topped the first-quarter 2023 revenue of $705.088 million.
On April 25, Evercore ISI Group analyst Steve Sakwa maintained an Outperform rating on Equity Residential and raised the price target from $67 to $70.
Similarly, on April 29, Piper Sandler analyst Alexander Goldfarb maintained Equity Residential at Neutral and raised the price target from $62 to $70.
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AvalonBay Communities Inc. AVB is a residential REIT that acquires, develops and manages multifamily communities. As of Dec. 31, AvalonBay Communities owned approximately 90,669 apartments directly or indirectly in 299 communities across 12 states and Washington, D.C., with 18 of those communities still under development.
On April 25, AvalonBay posted its first-quarter 2024 operating results. Core FFO of $2.70 beat the consensus estimate of $2.65 and FFO of $2.57 in the first quarter of 2023. Revenue of $677.245 million was below estimates of $705.75 million but ahead of first-quarter 2023 revenue of $673.64 million.
On April 29, three analysts weighed in on AvalonBay. Piper Sandler analyst Goldfarb maintained AvalonBay at Overweight and raised the price target from $207 to $230.
RBC Capital Markets analyst Brad Heffern maintained AvalonBay at Sector Perform and raised the price target from $191 to $196.
Barclays analyst Anthony Powell maintained AvalonBay at Overweight and raised the price target from $204 to $218.
Whichever analyst is the most accurate, AvalonBay could see a price increase from its recent close at $191.45.
SL Green Realty Corp. SLG is a New York City-based office REIT and the largest office building landlord in New York. As of March 31, SL Green Realty held interests in 57 buildings, totaling 32.4 million square feet.
Many income-oriented investors like owning SL Green Realty for its monthly dividend, which is presently $0.25 per share. However, the dividend was cut in December from $0.2708, and that's the second time since December 2022 that SL Green has disappointed investors with a cut.
On April 17, SL Green reported its first-quarter 2024 operating results. FFO of $3.07 easily beat the consensus estimate of $2.16 and was well above $1.53 per share in the first quarter of 2023. Revenue of $187.9 million beat the estimate of $152.2 million and topped first-quarter 2023 revenue of $245.8 million.
On April 18, BMO Capital analyst Kim upgraded SL Green Realty from Market Perform to Outperform and raised the price target from $56 to $58. That was followed by JPMorgan Chase & Co. analyst Anthony Paolone, who on April 25 maintained an Underweight position on SL Green but raised the price target from $43 to $44.
SL Green was recently trading near $51.50.
UDR Inc. UDR, formerly United Dominion Realty Trust, is a Highlands Ranch, Colorado-based residential REIT that owns, leases and manages approximately 60,000 apartment units across 21 markets in 13 states plus Washington, D.C. It has been in operation for over 50 years and is a member of the S&P 500. As of February, the average physical occupancy of its units was 97.1%.
On April 25, UBS analyst Michael Goldsmith upgraded UDR from Neutral to Buy and raised the price target from $38 to $44. The analyst noted that job growth and strong absorption will keep apartment demand strong. On April 29, Wedbush Securities analyst Richard Anderson reiterated UDR with an Outperform rating and maintained his previous $40 price target.
UDR will report its first-quarter 2024 earnings on April 30.
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