📖 Your Q2 Earnings Guide: Discover the Stocks ProPicks AI Highlights to Jump Post-EarningsRead more

UDR stock downgraded to equal-weight at Morgan Stanley, price target set at $37

EditorIsmeta Mujdragic
Published 02/26/2024, 08:08 AM
© Reuters.
UDR
-

On Monday, Morgan Stanley adjusted its stance on UDR, Inc. (NYSE:UDR), shifting its rating from Overweight to Equalweight and establishing a price target of $37.00. The firm's analysis indicated a change in perspective based on the company's recent performance and market positioning.

The real estate investment trust, known for its residential properties, was previously seen as a relative Overweight in Morgan Stanley's December supply deep dive. At that time, UDR's market performance was roughly on par with Sun Belt-focused peers Camden Property Trust (NYSE:CPT) and Mid-America Apartment Communities (NYSE:NYSE:MAA), despite UDR's more limited exposure to this region, at approximately 25%.

UDR's recent guidance fell short of consensus expectations, particularly regarding rent growth, which did not align with the company's primarily Coastal portfolio and its presumed resilience to increased supply in the market. This outlook has prompted the reassessment of UDR's stock.

Over the last quarter, UDR has seen a notable performance, with a return of around 9%, leading the apartment sector in gains. This contrasts with the sector's overall performance, where AvalonBay Communities (NYSE:NYSE:AVB) was identified as the weakest performer.

The price target of $37.00 set by Morgan Stanley reflects their current assessment of UDR's value, taking into account the company's market performance, portfolio characteristics, and recent guidance that has influenced the analyst's expectations for the stock's future trajectory.

InvestingPro Insights

UDR, Inc. (NYSE:UDR), a prominent real estate investment trust, has been the subject of recent analysis, with Morgan Stanley adjusting its rating to Equalweight and setting a price target of $37.00. As investors consider this new valuation, a glance at the company's financial health and market performance through InvestingPro's real-time data offers further clarity.

The company’s adjusted market capitalization stands at $12.96 billion, reflecting its significant presence in the residential property market. Despite a challenging environment, UDR's price-to-earnings (P/E) ratio on a trailing twelve-month basis as of Q4 2023 is reported at 99.58, which may suggest a premium valuation compared to industry peers. However, the PEG ratio, which relates the P/E ratio to the company's earnings growth rate, is notably low at 0.06, indicating potential for future value relative to earnings growth.

InvestingPro Data further reveals a stable gross profit margin of 66.34% for the same period, underscoring the company's ability to maintain profitability. Meanwhile, the dividend yield as of the latest data stands at an attractive 4.69%, paired with a dividend growth of 10.53%, which could be appealing to income-focused investors.

InvestingPro Tips suggest that the company's recent performance, including a 9% return over the last quarter, may be a factor for investors to consider when evaluating the stock's resilience and growth prospects. Additionally, with the next earnings date set for April 23, 2024, investors will be keen to assess whether UDR's performance aligns with the market's expectations.

For those looking to delve deeper into UDR's potential and to access more comprehensive analysis, InvestingPro offers additional tips. Use the exclusive coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, and unlock valuable insights that can inform investment decisions.

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

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.