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AvalonBay downgraded to Neutral on 2023 headwinds at Mizuho

Mizuho analyst Haendel St. Juste downgraded AvalonBay to Neutral from Buy with a price target of $170, down from $220. The analyst says "stubborn" inflationary and cost headwinds, along with a deceleration in renewal rates, should continue to pressure AvalonBay’s development yields. In addition, rising cap rates compresses the company’s earnings, which along with incremental bad debt risk "suggests a more limited relative opportunity," St. Juste tells investors in a research note.

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