Camden Property Trust To See Over 5% Growth In Same-Store Sales In FY23 Amid Strong FFO: Analyst Projects

Truist Securities analyst Michael Lewis reiterated the Buy rating on Camden Property Trust CPT, raising the price target to $134 from $127.

The company recently reported Q2 results, which included slightly better same-store results and lower interest expense than the analyst modeled.

The analyst projects 5.2% year-over-year same-store revenue growth in 2023 and 6.5% expense growth, driving 4.6% SSNOI growth within management's 4%-6% guidance range.

The analyst increased the 2023 FFO estimate to $6.86 from $6.80 per share, primarily due to higher same-store growth projections, which is a penny per share above the midpoint of management's $6.80-$6.90 per share guidance and a penny per share below the $6.87 per share consensus.

For FY24, the analyst raised the FFO estimate to $7.23 per share from $7.05, which is now above the $7.16 per share consensus. 

The analyst projects 3.5% Y/Y same-store revenue growth in 2024 and 3.6% expense growth, resulting in 3.5% SSNOI growth.

However, sunbelt-focused apartment REITs like CPT have generally underperformed coastal ones this year (CPT -3% YTD versus +1% VNQ) due to higher new supply across the South, Lewis adds. 

The analyst expects the supply growth to begin a gradual decline after 1Q24 while demand likely remains resilient.

Price Action: CPT shares are trading lower by 1.21% to $108.57 on the last check Tuesday.