Valued at a market cap of $14.9 billion, UDR, Inc. (UDR) is a leading multifamily real estate investment trust (REIT). The Highlands Ranch, Colorado-based company, specializes in owning, managing, and developing apartment communities in high-demand markets across the United States.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and UDR fits this criterion perfectly. UDR is renowned for its strategic focus on high-barrier-to-entry markets, with its ownership of 60,124 apartment homes, including 311 under development, and its strategic investment in high-demand, low-affordability markets, positioning it as the 19th largest apartment owner in the U.S. as of March 31, 2024.
However, UDR's shares have declined 4.9% from its 52-week high of $47.55, reached on Sep. 16. Shares of UDR are up 11.7% over the past three months, underperforming The Real Estate Select Sector SPDR Fund's (XLRE) 16.6% rise in the same period.
In the longer term, over the past 52 weeks, UDR's shares have increased 26.6%, lagging behind XLRE’s return of 32.2%. Yet, shares of UDR have risen 18.1% on a YTD basis, surpassing XLRE's 10.9% gain over the same time period.
UDR has been in a bullish trend, trading above its 50-day and 200-day moving averages since late April.
Despite reporting better-than-expected Q2 FFO of $0.62 per share and adjusted revenue of $413.3 million, UDR's shares fell 1.9% the next day due to the impact of excess apartment supply in the Sunbelt region, which is expected to pressure average rental rates. Additionally, while the company raised its full-year guidance, investors have reacted cautiously to the slower growth in same-store expenses and occupancy rates.
In comparison, rival Equity Residential (EQR) has seen a 21.5% rise on a YTD basis and a 26.7% gain over the past 52 weeks, outperforming UDR's performances in both periods.
Despite UDR’s underperformance over the past year, analysts are moderately optimistic about the stock's prospects. The stock has a consensus rating of “Moderate Buy” from the 24 analysts covering it, and it is currently trading slightly below the mean price target of $45.45.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
