Sun Communities Faces Challenges in RV Segment and UK Market Despite Strong Q1 Earnings

Analyst Jeffrey Spector from Bank of America Securities reiterated a Sell rating on Sun Communities (SUI – Research Report) and increased the price target to $132.00 from $124.00.

Jeffrey Spector’s rating is based on a combination of factors that highlight challenges facing Sun Communities. Despite reporting better-than-expected earnings for the first quarter of 2025, driven by improved manufactured housing (MH) performance and cost controls, the company faces significant headwinds in its recreational vehicle (RV) segment. The RV business has been adversely affected by a decline in transient RV revenue, which dropped by 20.6%, due to factors such as post-COVID travel normalization, macroeconomic uncertainties, and fewer Canadian visitors.
Additionally, Sun Communities has lowered its expectations for RV revenue for the rest of the year, citing slower reservation pacing and reduced visibility as customers opt for shorter booking windows. While the company has increased its price objective to $132, reflecting a stronger balance sheet, concerns remain over CEO succession, RV segment challenges, and exposure to the UK housing market. These factors contribute to the reiterated Underperform rating, as the valuation and risks associated with the RV and UK markets continue to weigh on the stock’s potential performance.

Spector covers the Real Estate sector, focusing on stocks such as Cousins Properties, Eastgroup Properties, and Getty Realty. According to TipRanks, Spector has an average return of 4.1% and a 49.65% success rate on recommended stocks.