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Camden Property Trust
RBC Capital Markets analyst Brad Heffern downgraded the ratings for Camden Property Trust (NYSE:CPT) from Outperform to Sector Perform, while keeping the price target at $122.
While Camden Property Trust reported stronger-than-expected July quarter results, these were largely driven by the peak leasing season rather than improving fundamentals, Heffern said in the downgrade note. He expects the company to miss its guidance for the back half of 2024.
This may be "another long fall/winter for the Sun Belt," the analyst wrote. "While tapering supply is in sight, the supply problem could be replaced by a demand problem if move-outs to buy a home return to normal levels as rates come down," he further stated.
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Invitation Homes
RBC Capital Markets analyst Brad Heffern downgraded the ratings for Invitation Homes Inc (NYSE:INVH) from Outperform to Sector Perform, while lowering the price target from $37 to $36.
The leasing spreads for Invitation Homes in the third quarter "show further deceleration, and we think renewals show a higher level of tenant push back on rate increases," Heffern said. "For-sale housing could potentially become a headwind with mortgage rates moving lower."
Given the high average resident income, tenants are more likely to afford a house, the analyst stated. "We continue to think 2025 consensus estimates are too high, especially with headwinds from INVH's swaps rolling off," he further wrote.
LGI Homes
Wedbush analyst Jay McCanless upgraded the ratings for LGI Homes Inc (NASDAQ:LGIH) from underperform to Neutral, while raising the price target from $97 to $125.
LGI Homes generated sales absorption of 4.6 homes per month in August, the highest absorption pace since December 2023, McCanless said in the upgrade note.
The company appears to be on track "to achieve our F3Q24 closing forecast of 1.8k homes assuming September's sales absorption and community count are in line with August's levels," he added.
The catalysts for the stock include the pullback in share price from Aug. 30 to Sept. 6, a potential for positive cash flow reversal and steady declines in mortgage rates so far in the third quarter, the analyst stated.
"Cash flow trajectory should shift from a net outflow to a net inflow during F4Q24 and F1Q25," he further wrote.
Price action at the time of publication:
- Camden Property Trust's shares were down by 0.29% to $121.84
- Shares of Invitation Homes had declined by 1.17% to $35.54
- LGI Homes' stock had jumped by 2.14% to $107.04
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