Analyst Mark Rothschild of Canaccord Genuity maintained a Hold rating on Canadian Apartment, reducing the price target to C$47.00.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Mark Rothschild has given his Hold rating due to a combination of factors impacting Canadian Apartment’s performance. Despite a 2.6% increase in funds from operations per unit, driven by strong same-property net operating income growth, the company faces challenges from rising interest expenses due to refinancing at higher rates. Additionally, the strategic divestment of older assets, while beneficial in the long term, has been short-term dilutive to earnings.
While the portfolio shows healthy operating performance with near full occupancy and rental rate increases, there are signs of softening fundamentals. This is evidenced by an increase in tenant incentives and expected credit losses. Furthermore, despite trading at an 11.3% discount to the net asset value estimate, the stock’s valuation on a cash flow multiple basis is higher than the average for its peers, justifying the Hold rating.
In another report released today, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a C$47.00 price target.