Wolfe Research analyst Andrew Rosivach CFA upgraded the rating on American Homes to a Buy today, setting a price target of $38.00.
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Andrew Rosivach CFA has given his Buy rating due to a combination of factors that suggest a positive outlook for American Homes (AMH). He notes that while the current market conditions are not ideal, they are far from deteriorating, and the valuation of AMH is particularly attractive. The fundamentals of the single-family rental sector are deemed stable, with demographic trends appearing more favorable compared to multifamily housing. Despite concerns about supply in certain markets, the overall impact is considered modest.
Furthermore, Andrew highlights that AMH’s earnings are expected to grow steadily, supported by stable top-line growth and development activities. Although lease spreads are slowing, a mid-single-digit earnings growth is anticipated. Additionally, the stock’s current pricing reflects a more negative outlook than warranted, trading at a discount compared to historical averages. This presents a compelling opportunity for investors, as AMH’s growth rate over the past nine years has outpaced its peers, making it an appealing option for those willing to invest under less-than-perfect conditions.
In another report released on September 15, Evercore ISI also maintained a Buy rating on the stock with a $40.00 price target.