UPDATE: Credit Suisse Starts AvalonBay Communities (AVB) at Neutral

June 22, 2022 4:12 PM EDT
Get Alerts AVB Hot Sheet
Price: $219.24 +0.39%

Rating Summary:
    14 Buy, 22 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 33 | New: 7
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(Updated - June 22, 2022 4:27 PM EDT)

Credit Suisse analyst Tayo Okusanya initiates coverage on AvalonBay Communities (NYSE: AVB) with a Neutral rating and a price target of $208.00.

The analyst comments "We initiate coverage of AVB with a Neutral rating and $208 TP. In our view, AVB is one of the strongest developers in the Apartment REIT sector, with $4B in development rights expected to provide growth opportunities across all regions over the next several years. Given that development spreads are 250-350 bps higher than acquisition cap rates, this has been a large source of earnings growth for AVB. However, we are concerned that rising construction costs could hurt development yields, thereby causing a slowdown in development starts at AVB. Slowing tech job growth is also an overhang on the current portfolio (18% of NOI in Northern California) and the development rights pipeline (20% in N. California). Our 2023/2024 estimates are below consensus on these two concerns. A growing presence in Denver and Southern Florida should be a positive given migration/demographic patterns driving population, job, and income growth in these two markets."

For an analyst ratings summary and ratings history on AvalonBay Communities click here. For more ratings news on AvalonBay Communities click here.

Shares of AvalonBay Communities closed at $191.40 yesterday.

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