NEW YORK (TheStreet) -- Apartment Investment & Management Co. (AIV) - Get Report was upgraded to "overweight" from "equal weight" at Barclays this morning. The firm raised its price target to $43 from $40.
Aimco grew 42% in 2014, outperforming peers, and Barclays believes the company's growth is still underappreciated by the market.
"In an environment where finding value is difficult, we think AIV shares present a compelling mismatch between valuation and growth potential in the multifamily space," Barclays said in a note.
The firm believes that there are several catalysts to drive shares higher, including an educational investor day in early October, an improved balance sheet, and an acceleration in multifamily fundamentals in Washington, D.C.
Shares of Aimco were down 0.03% to $35.19 in mid-afternoon trading on Wednesday.
Separately, TheStreet Ratings team rates APARTMENT INVST & MGMT CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate APARTMENT INVST & MGMT CO (AIV) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, good cash flow from operations and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, APARTMENT INVST & MGMT CO's return on equity exceeds that of both the industry average and the S&P 500.
- Compared to where it was trading a year ago, AIV's share price has not changed very much due to (a) the relatively weak year-over-year performance of the overall market, (b) the company's stagnant earnings, and (c) other mixed results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Net operating cash flow has slightly increased to $92.65 million or 3.54% when compared to the same quarter last year. Despite an increase in cash flow, APARTMENT INVST & MGMT CO's cash flow growth rate is still lower than the industry average growth rate of 15.97%.
- AIV, with its decline in revenue, underperformed when compared the industry average of 9.7%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- APARTMENT INVST & MGMT CO's earnings per share declined by 23.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, APARTMENT INVST & MGMT CO increased its bottom line by earning $2.05 versus $0.29 in the prior year. For the next year, the market is expecting a contraction of 40.7% in earnings ($1.22 versus $2.05).
- You can view the full analysis from the report here: AIV Ratings Report