Story updated at 10 a.m. to reflect market activity.
AIMCO fell -0.3% to $31.44 in morning trading.
The firm reiterated its "neutral" rating for the company. According to UBS analysts, the new price target reflects a higher valuation of AIMCO's redevelopment assets and lower economic cap rate to remaining portfolio.
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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 some important positives, 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 impressive record of earnings per share growth, compelling growth in net income, revenue growth, notable return on equity and good cash flow from operations. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- APARTMENT INVST & MGMT CO reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, APARTMENT INVST & MGMT CO turned its bottom line around by earning $0.28 versus -$0.63 in the prior year. This year, the market expects an improvement in earnings ($0.65 versus $0.28).
- 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 1002.0% when compared to the same quarter one year prior, rising from $5.89 million to $64.93 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.3%. Since the same quarter one year prior, revenues slightly increased by 2.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market on the basis of return on equity, APARTMENT INVST & MGMT CO has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. 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.
- You can view the full analysis from the report here: AIV Ratings Report