Analyst John Kim from BMO Capital maintained a Buy rating on AvalonBay (AVB – Research Report) and keeping the price target at $242.00.
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John Kim has given his Buy rating due to a combination of factors that indicate potential growth for AvalonBay. Despite a lackluster fourth quarter in 2024, where the company missed on Core FFOps because of lower-than-expected lease growth and higher expenses, there are positive signs looking forward. The company’s 2025 guidance shows an improvement in blended growth rates and development starts, suggesting a stronger year ahead.
Positive aspects influencing the rating include the expected acceleration in blended rates for 2025, with a notable improvement already seen in January. Additionally, AvalonBay’s development pipeline is anticipated to expand significantly, with new starts providing attractive yields. The company also foresees strong performance in key markets like Charlotte and Dallas, and has seen a significant sequential increase in blended rates in Northern California. These factors contribute to a positive outlook, justifying the Buy rating despite some of the challenges faced in the previous quarter.
In another report released yesterday, Colliers Securities also maintained a Buy rating on the stock with a $240.00 price target.