Headquartered in Germantown, Tennessee, Mid-America Apartment Communities, Inc. (MAA) is a globally recognized real estate investment trust (REIT) with a market cap of $18.7 billion. It specializes in acquiring, developing, redeveloping, and managing multifamily homes across the Southeastern, southwestern, and mid-Atlantic regions of the United States.
Shares of this leading residential REIT have underperformed the broader market over the past year. MAA has gained 10.8% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.7%. However, things are looking up for the stock in 2024 as MAA stock is up 19.2%, surpassing SPX’s 18% rise on a YTD basis.
Narrowing the focus, MAA has also lagged behind the Residential REIT ETF (HAUS). The exchange-traded fund has gained about 26.3% over the past year.
On Jul. 31, Mid-America Apartment Communities reported its Q2 earnings report, and its stock surged 4.8% in the subsequent trading session. Its core FFO was $2.22 per share, surpassing Wall Street expectations of $2.20 per share. The company also posted net income of $101 million, or 86 cents per share, and revenue of $546.4 million, slightly beating forecasts. For the full year, the management expects FFO to range between $8.74 and $9.02 per share.
For the current fiscal year, ending in December, analysts expect MAA’s EPS to decline 3.1% annually to $8.89 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing on one other occasion.
Among the 24 analysts covering MAA stock, the consensus is a “Moderate Buy,” a step up from “Hold” three months ago. That’s based on nine “Strong Buy” ratings, one “Moderate Buy,” 12 “Holds,” and two “Strong Sell.”
This configuration is more bullish than a month ago, with seven analysts suggesting a “Strong Buy.”
On Aug. 26, Truist Securities analyst Michael Lewis raised the price target for MAA to $167 from $156 while maintaining a “Buy” rating after the company's Q2 results. The analyst cited lower interest rate expectations and anticipated significant improvement in the company’s same-store net operating income growth in the second half of the year as supply pressures ease.
While MAA currently trades above its mean price target of $152.45, the Street-high price target of $189 suggests an upside potential of 17.9%.
On the date of publication, Kritika Sarmah 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.
