Truist Securities升级AvalonBay，下调Elme评级

Truist Securities upgraded AvalonBay (NYSE:AVB) but downgraded Elme (NYSE:ELME), maintaining its Neutral rating on the apartment REITs sector.

"We think AVB shares are undervalued at a historically low FFO multiple and 5.9% implied cap rate, despite healthy projected earnings growth amid a dearth of new supply in the company’s markets that should help offset potentially soft national job growth," said analysts Michael Lewis and Deniz Gunaydin.

The investment bank raised its recommendation on AvalonBay to Buy from Hold, but lowered its price target to $218 from $224. Shares were +0.88% to $194.33 during Thursday morning trade.

"AVB is the second-worst performing stock in our nine-company apartment REIT coverage universe YTD and over the past 12 months. We think this pullback presents an opportunity to acquire shares of a high-quality company," said the analysts.

Meanwhile, ELME was cut to Hold, with the price target reduced to $2 from $18.

"ELME announced last month that it is selling 19 properties and plans to market the remaining 10 for sale, resulting in expected total shareholder distributions of $17.58-$18.50ps by the end of next year," noted the analysts.

"We think the sales are likely to occur and the high end of the distribution range appears achievable, but our Hold rating reflects our view that investors may find better risk-adjusted returns elsewhere," added the research note.

ELME shares were 0.94% down to $16.94.