NEW YORK (TheStreet) -- UBS increased its price target on AvalonBay Communities (AVB) - Get AvalonBay Communities, Inc. Report to $147 and set a "buy" rating. The development pipeline drove the firm's decision.
The stock was flat at 9:45 a.m. on Tuesday.
Separately, TheStreet Ratings team rates AVALONBAY COMMUNITIES INC as a "buy" with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate AVALONBAY COMMUNITIES INC (AVB) a BUY. This is driven by a few notable 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 robust revenue growth, expanding profit margins, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 8.7%. Since the same quarter one year prior, revenues rose by 29.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income increased by 87.9% when compared to the same quarter one year prior, rising from $75.43 million to $141.74 million.
- 36.01% is the gross profit margin for AVALONBAY COMMUNITIES INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 34.97% significantly outperformed against the industry average.
- AVALONBAY COMMUNITIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AVALONBAY COMMUNITIES INC reported lower earnings of $0.43 versus $2.54 in the prior year. This year, the market expects an improvement in earnings ($3.32 versus $0.43).
- In its most recent trading session, AVB has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: AVB Ratings Report
Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.