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Goldman Sachs sets UDR stock PT to $39 with neutral rating

EditorIsmeta Mujdragic
Published 02/22/2024, 09:52 AM
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On Thursday, Goldman Sachs resumed coverage on shares of UDR, Inc. (NYSE:UDR), a real estate investment trust, with a Neutral rating and established a price target of $39.00. The firm acknowledged the company's efforts in revenue and cost initiatives, noting the potential for conservative aspects in the guidance provided. However, the analysis pointed out that UDR is currently navigating through supply challenges within its Sunbelt markets. Additionally, the company's Developed Community Pipeline (DCP) book is experiencing headwinds.

The coverage resumption comes with an observation that UDR's stock multiple has faced downward pressure. Although there is recognition of the company's positive operational strategies, the analyst predicts limited opportunity for an increase in stock valuation in the short term due to the mixed factors affecting the company's performance.

The price target set by Goldman Sachs suggests a 14% total return potential for UDR's stock, which includes a 5% dividend yield. This projection is based on the current market dynamics and the company's financial outlook over the next 12 months.

The analyst's commentary provides a measured outlook on UDR, balancing the company's internal efforts to improve its financial position with the external challenges it faces. Despite the positive initiatives by UDR, the Neutral rating reflects a cautious stance on the stock's near-term growth potential amidst the prevailing market conditions.

InvestingPro Insights

As Goldman Sachs resumes coverage on UDR, Inc. with a neutral outlook and a price target of $39.00, a deeper dive into the company's financial health is essential for investors eyeing the real estate investment trust sector. According to the latest InvestingPro data, UDR's market capitalization stands at a robust $13.06 billion, indicating the company's significant presence in the market.

Investors should note the company's P/E ratio, which is currently not applicable, but the adjusted P/E ratio for the last twelve months as of Q4 2023 is 98.18. This high ratio suggests that investors are expecting higher earnings growth in the future, which aligns with UDR's revenue growth of 7.22% over the same period. However, the quarterly revenue growth did see a slight decline of -1.84%, signaling potential short-term challenges in revenue streams.

The company's dividend yield as of early 2024 stands at an attractive 4.63%, coupled with a notable dividend growth of 10.53% over the last twelve months. This may appeal to income-focused investors, especially considering the Ex-Date of the Last Dividend was on January 9, 2024. Additionally, UDR's stock is currently trading at 81.41% of its 52-week high, with a previous close price of $36.30.

For those seeking more comprehensive analysis, InvestingPro offers additional insights and metrics to help investors make informed decisions. Currently, InvestingPro lists several more tips, which subscribers can access for a deeper understanding of UDR's financial position and market performance. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to these valuable InvestingPro Tips.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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