Mid-America Apartment Communities raised to Outperform at JMP

Jul. 29, 2022 7:30 AM ETMid-America Apartment Communities, Inc. (MAA)By: Liz Kiesche, SA News Editor1 Comment

Text REIT made of wood cubes on white textured putty background. Abbreviation from "Real estate investment trust". Business concept. Square wood blocks. Top view, flat lay.

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  • JMP analyst Aaron Hecht upgraded Mid-America Apartment Communities (NYSE:MAA) to Market Outperform from Market Perform as he sees the REIT better able to navigate volatile capital market conditions than its peers on its position as the largest pure-play Sunbelt REIT and its "impeccable" balance sheet.
  • "We view NOI (net operating income) growth as the easiest mechanism for a REIT to deliver value in a rising rate environment and MAA is better positioned to achieve that goal than peers or the industry," Hecht wrote in a note to clients.
  • Apartment demand is expected to increase as rising interest rates constrain single-family homebuilding. In addition, he expects families to continue migrating to the Sunbelt for affordability issues, and employers will also continue moving to the South for cost/tax savings.
  • Furthermore, the short duration of apartment leases allow rents to reset faster then other real estate sectors.
  • Hecht's Market Outperform rating contrasts with the Quant rating of Hold. Bot SA Authors and Wall Street have average ratings of Buy.
  • SA contributor Justin Purohit also sees Mid-America (MAA) well-positioned to capitalize on favorable long-term housing trends in the Sunbelt.

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