In a report released today, John Kim from BMO Capital maintained a Buy rating on UDR (UDR – Research Report), with a price target of $46.00.
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John Kim has given his Buy rating due to a combination of factors that indicate a positive outlook for UDR. The company has shown an increase in occupancy rates, which rose by 50 basis points quarter-over-quarter, reaching over 97% in January. This suggests strong demand and effective leasing strategies. Furthermore, UDR anticipates an acceleration in blended lease rates to 2.5% in 2025, aligning with peers like EQR, and expects only a slight slowdown in same-store revenues, supported by additional income and improvements in occupancy and bad debt.
Additionally, UDR projects a reduction in insurance expenses by 5.5% in 2025, which could contribute to cost savings. Interest expenses are also expected to provide a financial advantage, adding $0.01 to the overall benefit. Moreover, the company experienced a significant decrease in annualized turnover, which dropped by 260 basis points year-over-year to 33.1% in the fourth quarter of 2024. These factors collectively support the Buy recommendation, as they indicate potential for improved financial performance and operational efficiency.
In another report released on January 24, Barclays also maintained a Buy rating on the stock with a $48.00 price target.