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Investing.com - Cantor Fitzgerald initiated coverage of AvalonBay Communities (NYSE:AVB) with a Neutral rating and a $205 price target, representing a potential 5.2% upside from current levels. The company, currently trading at a PEG ratio of 0.63 and maintaining a 3.6% dividend yield, shows mixed signals according to InvestingPro data.
The research firm’s coverage begins as AvalonBay, a multifamily real estate investment trust with a $27.5 billion market cap and a 32-year track record of consistent dividend payments, continues its expansion beyond gateway markets into Sunbelt regions.
Cantor Fitzgerald based its valuation on a 2026 estimated AFFO multiple of 19x, which stands above the 17.9x average for property sector peers, reflecting the company’s position as a premier multifamily developer.
The firm noted that AvalonBay’s increased development starts should allow it to deliver new units during a period when relatively few competing projects are entering the market.
Despite recognizing AvalonBay as "a leading organization" poised for long-term success, Cantor Fitzgerald suggested that meaningful growth opportunities may be approximately a year away, citing ongoing uncertainty in the job market.
In other recent news, AvalonBay Communities reported its second-quarter 2025 earnings, which showcased a significant earnings per share (EPS) beat. The company achieved an EPS of $1.88, surpassing the projected $1.20, representing a 56.67% surprise. However, the revenue did not meet expectations, totaling $689.9 million compared to the forecast of $757.59 million, marking an 8.93% shortfall. In terms of analyst activity, Truist Securities upgraded AvalonBay Communities from Hold to Buy, citing an opportunity to acquire shares at a discount to fair value. Meanwhile, Mizuho downgraded the stock from Outperform to Neutral, pointing to anticipated growth challenges, particularly in the Los Angeles market and risks in other major cities. On the other hand, Morgan Stanley upgraded AvalonBay from Equalweight to Overweight, highlighting the company’s superior growth prospects despite its valuation aligning with peers. These developments reflect a mixed sentiment among analysts regarding AvalonBay’s future performance.
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